According to Rightmove, average UK house prices increased by 3% between May and June.
It is thought that the Conservative election victory has boosted investor confidence and has triggered a positive reaction towards the property market.
Ahead of the general election, property prices experienced a 0.1% decline in May. Many would-be buyers and investors held off purchasing property until policies such as the prospect of Labour’s proposed mansion tax were decided.
Miles Shipside, Rightmove director and housing market analyst commented: “Some buyers had been holding back in the weeks before the election, leading to some sellers suffering an unseasonal price standstill in the late spring.
“In particular, sentiment and prices got hit in the mooted Mansion Tax price brackets. Now 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.
“This has pushed up some of the asking prices of those properties that have been marketed, meaning that buyers are faced with paying a new average record price high for the more limited choice available. It could be said that this is the price of political certainty.
“While much of the price momentum has emanated from the south where the supply/demand imbalance is more acute, the strength of demand for the right property is resulting in a record price wave rolling further north, with the Midlands also at new highs.”
The 3% rise in property prices is the highest rise the UK has seen since February 2014. On a year-on-year basis, house prices are now up 4.5%.
The average cost for first time buyers has increased by 6.2% over the last year, with the average asking price now at £175,628.
Despite the rise in property prices, it seems that supply is currently unable to keep up with demand. When compared to last year, the number of properties coming to market has decreased by 8.5%.
“Agents report that the election surprise has given a boost to market sentiment, driven by more certainty about future economic and taxation policies.
“While would-be buyers have been able to respond quickly to these events, many potential sellers have so far failed to come to market,” Shipside added.