House prices have shot up to record highs after the Conservative election victory triggered a rush to buy in an overcrowded market.
Average asking prices increased by 3pc between May and June as buyers and sellers reacted to the previous month’s vote, with properties going on the market at an average £294,351 according to Rightmove.
This contrasts with the 0.1pc decline in house prices in May, when buyers balked at the prospect of Labour’s proposed mansion tax and the instability of a potential coalition with the SNP.
“The unexpected election outcome has caused a strong rebound, prompting an upturn in buyer demand and helping new seller asking prices to hit their highest ever levels,” said Rightmove’s Miles Shipside.
“The election surprise has given a boost to market sentiment, driven by more certainty about future economic and taxation policies.”
The 3pc monthly rise was the highest since February 2014, and on an annual basis, prices are up by 4.5pc.
For first-time buyers, the cost of getting on the property ladder has risen by 6.2pc in a year, with the average asking price now £175,628.
Rightmove’s monthly index, which tracks asking prices and housing supply in England and Wales, showed that prices were at a new record in six of 10 regions.
A surge in demand in the wake of the election has not, however, been met by increasing supply of homes, squeezing buyers further. Rightmove said visits to its website had risen by 22pc in the last year, but the number of properties put up for sale had declined by 8.5pc.
A notable exception was at the top end of the market, where properties that would have been hit by Labour’s mansion tax flooded the market following the election.
Rightmove saw an 86pc increase in properties worth £2m being put up for sale in the 30 days after the election compared with the previous 30 days.
“That will be of no comfort or use to the mass-market which needs more choice in the right locations at more affordable prices,” Mr Shipside said.
“It could be said that this is the price of political certainty.”
Investors have rushed into UK property since the election, as the threats of a mansion tax and the scrapping on “non-domicile” tax status subsided.
According to figures from Lloyds Bank, net sentiment, the balance of investors who are optimistic about an asset against those who are negative, towards UK property has risen from 47.1pc to 55pc.
This makes it the most popular investment among the 10 that Lloyds tracks, including shares in different regions, bonds, gold and commodities.
Positive sentiment towards UK shares has risen from 26.3pc to 38.4pc, which means the collective interest in UK assets enjoyed its highest rise after the election since records began in March 2013.
At the same time, investors became more negative about eurozone shares, with politicians yet to come to a solution on Greece, and Japanese stocks.
Increasing confidence in Britain comes despite the prospect of an EU referendum, which led Standard & Poor’s to downgrade the UK’s credit rating last week.
S&P, the only ratings agency to still give the UK a gold-plated AAA rating, downgraded its outlook from “stable” to “negative”, saying an EU exit would carry “important risks to the UK’s longer-term economic prospects”.