House prices fell back slightly by 0.1% in September
(Picture: PA Wire)Homeowners who voted Tory in 2019 would be put off backing the party at the next General Election if property prices fall, a new survey has found.
Almost two in five (38 per cent) of Conservative voters are less likely to back the party if house prices drop by as much as 10 per cent next year the poll, by Savanta ComRes and commissioned by the Liberal Democrats, found.
One in four Londoners and one in three people in the South East would be less likely to vote for the party in this scenario, according to data released on Wednesday.
Liberal Democrat Treasury spokesman Sarah Olney MP said Chancellor Kwasi Kwarteng’s budget had “betrayed homeowners in the capital and commuter belt”.
She added: "In one fell swoop, Liz Truss and Kwasi Kwarteng crashed the pound and trashed the housing market.
“Meanwhile, renters are drowning in unimaginable bills. Why the Chancellor chose helping big banks over solving the housing crisis is just bizarre.”
Surveyors warned "storm clouds are visible" over the housing market onThursday as surging mortgage rates are expected to push house prices downwards in the year ahead.
The market lost momentum in September, with new buyer inquiries falling for the fifth month in a row, the Royal Institution of Chartered Surveyors (Rics) said.
A limited supply of properties for sale is still supporting modest price rises, but this looks set to end as the pace of growth slows markedly, the latest report from Rics indicated.
In the mini-Budget last month, the government announced a cut to stamp duty, the tax paid when people buy a property.
The threshold was raised to £250,000 from its current £125,000 level.
Meanwhile the threshold for first-time buyers was increased from £300,000 to £425,000.
However, rising mortgage rates, currently averaging around 6 per cent, are expected to outweigh the boost that buyers could get from stamp duty cuts in the recent mini-budget.
New instructions to sell have continued to fall, Rics said, with stock levels remaining at historic lows.
Estate agents are holding just 34 homes on average on their books.
Simon Rubinsohn, Rics chief economist, said: "The turmoil in mortgage markets in recent weeks has compounded the increasing level of economic uncertainty resulting from higher energy bills and the wider cost-of-living crisis, in shifting the dial in the housing market.
"Even though the headline price balance remains in positive territory for now, storm clouds are visible in the deterioration of near-term expectations for both pricing and sales.
“Looking further out, the picture portrayed by the Rics survey has clearly shifted in a negative direction.
"How this plays out in terms of hard data will inevitably depend in part on the state of the mortgage market once it settles down, but it is difficult not to envisage further pressure on the housing sector as the economy adjusts to higher interest rates and the tight labour market begins to reverse.
"For now, mortgage arrears and possessions remain at historic lows but they are inevitably going to move upwards over the next year, as pressure on homeowners grows.
"However, as lenders have been a lot more cautious through this cycle, with high loan-to-value mortgage accounting for a much smaller share of the lending book than in the past, this should help to limit the adverse impact on the market."
