Home sales slumped by almost a third in Greater London year-on-year in the spring, as changes to Stamp Duty rates, high property prices and Brexit uncertainty slowed the market.
The latest monthly index from estate agent Your Move shows that in the three months to the end of April, home sales in Greater London were down by 29% on the same period in 2016.
Much of the decrease followed a Government overhaul of Stamp Duty, which encouraged buy-to-let landlords and second home buyers to rush through deals in March 2016.
Home Sales Slump by a Third in Greater London in a Year
Data from HM Revenue & Customs (HMRC) shows a huge spike in sales during March last year, while mortgage lenders reported a surge in activity after the Stamp Duty surcharge came into force on 1st April 2016.
But while a sharp fall from that peak may have been expected, home sales in the capital were down markedly when compared to 2015’s figures, Your Move has found, showing a decline of 19%.
The Your Move index, which is compiled by property consultancy Acadata and based on figures from Land Registry and other indices, shows a significant slowdown for home sales in London, the South East and East of England, but increases in other less expensive areas when compared to 2015.
In Wales, sales dropped by 7% annually, but were 13% higher over the two years. Meanwhile, in the North East, they had fallen by 4% on 2016, but were up by 10% on the previous year.
Within London, there was also a divide along house price lines, with home sales dropping least in Havering, Newham and Bexley – three of the four cheapest boroughs.
According to most reports, house prices across the country have remained stable, with some research finding that prices have dropped in recent months, while others show small increases.
Your Move’s index shows that England and Wales experienced a 0.3% increase in the average house price. It states that average prices rose to a new peak of £303,200, following a year-on-year rise of 4.8%.
Acadata reports that there was little sign that the General Election had dampened the market in May, but there had been a long-term shift in activity.
It says: “Many households are deterred from moving not just because there is a shortage of suitable options to buy, but also because of the costs of moving and not least the rate of Stamp Duty now being levied on higher value homes.”
The Managing Director of Your Move, Oliver Blake, comments on the index: “The market remains resilient and there’s encouraging activity in the north, but we need to urgently address the serious blockages in housebuilding holding back labour mobility and economic competitiveness in too many areas of the country.”
Russell Quirk, the Founder and CEO of online estate agent eMoov.co.uk, adds: “The latest industry data shows London property transactions are on the fall, with prices likely to follow or at least stagnate.
“This lack of buyer demand will have been largely fuelled by those waiting for some stability from last week’s vote. However, it is likely this market slowdown will now linger like a bad smell over the coming months as a result of the rather unsavoury outcome.”
Another industry expert has assessed what the General Election outcome will mean for the London property market: /election-result-london-property-market/