The biggest declines in property transactions following the aborted March Brexit deadline were in the South, new research shows.
An analysis by property developer Southern Grove reveals which areas of the UK had the biggest house sales slump during May 2018 to May 2019.
The results show that UK residential sales volumes began to collapse on an annual basis in May. However, there was an overall increase in the number of homes sold during that period, according to the latest Land Registry data.
Southern Grove has highlighted that stretched valuations made the South acutely vulnerable to the risks associated with this political deadlock. As such, there was a widespread decline in sales with much of southern England and southern Wales skewing the overall picture.
It was in June’s HMRC figures that the house sales slump was first noticed. Sales volumes had dropped 11.3% in the 12 months to May 2019, as homeowners and buyers decided to wait for a final Brexit decision in March.
Of 406 local authority areas in the UK, 168 (41.4%) saw transactions fall between May 2018 and May 2019. 104 of these places (62%) were in the South.
Year on year figures reached a 16.5% fall in June and a 12.4% drop in July before largely recovering in August.Southern Grove believes unrealistic vendors and costly Stamp Duty exacerbated the slowdown.
The following table shows the 20 worst affected local authority areas between May 2018 and May 2019:
|Local Authority||% Fall in Transactions May 2018 to May 2019|
|Hammersmith and Fulham||-25.9%|
|Barking and Dagenham||-24.1%|
In the year to May 2019, Wales saw sales volumes climb 5.3% on average with nine of 22 local authority areas (41%) seeing declines.
In England, transactions increased by 2.9% on average but fell annually in 157 of 352 areas (44.6%).
In Scotland, just two of 32 local authorities (6.3%) saw a fall in sales and the entire country actually recorded a 20.5% rise in transactions.
Andrew Southern, Chairman of developer Southern Grove, commented: “This is an eye-opening dissection of a collapse in sales that was clearly weighted towards the South. It’s a region that has seen huge price growth over the past five years so it’s no accident.
“Homeowners in more expensive areas clearly felt it was better to ride out the storm, as any subsequent purchase would carry a hefty stamp duty bill at a time when they couldn’t be confident property values would be bulletproof in the medium term.
“In that situation, it is only human to wait and see what happens. High valuations give homeowners a taste for the piggy bank they think their home has become and they are often wary of doing anything that could jeopardise that peak valuation.
“It’s in this type of market that the hammer blow of stamp duty is most unhelpful. It’s a tax so punitive as to be totally counterproductive.”