The Capital sees more than 40% crash in home sales

The Capital sees more than 40% crash in home sales

Experts have their say on the Land Registry House Price Index report for September 2016

Sales during July 2016, the most up-to-date Land Registry figures available, show that:

  • the number of completed house sales in England fell by 28.1% to 66,870 compared with 93,040 in July 2015
  • the number of completed house sales in Wales fell by 23.4% to 3,525 compared with 4,603 in July 2015
  • the number of completed house sales in London fell by 43.3% to 7,074 compared with 12,481 in July 2015
  • there were 490 repossession sales in England in July 2016
  • there were 54 repossession sales in Wales in July 2016
  • the lowest number of repossession sales in England and Wales in July 2016 was in the East of England.

Home sales in the UK fell by 4.3% between August and September, with levels remaining lower than in 2014, 2015 and before the stamp duty changes in early 2016. See the economic statement.

In addition, the latest house price data for September 2016 shows that:

  • Average house prices in the UK have increased by 7.7% in the year to September 2016, the same as the previous month
  • The average UK house price was £218,000 in September 2016. This is £16,000 higher than in September 2015
  • London continues to be the region with the highest average house price at £488,000
  • London house prices rose 1.4% month-on-month – the fastest rate of any region
  • In Croydon house prices have risen from £320,175 to £373,339 year-on-year (16.6%)
  • Average house price of a new build home in London has increased 23.3% annually
  • Average house price for a first time buyer in London has risen 11% year-on-year

Andy Somerville, Director at Search Acumen, comments: “Flat or falling prices are damaging for market confidence, but they are also symptomatic of a bigger problem, and that is the number of transactions which are down significantly on this time last year. Those who would otherwise be rushing to buy a home are now putting off their decision, because of uncertainty around Brexit’s impact on the economy, and this is resulting in less work for conveyancers and the many other industries who rely on an active property market.

“Despite flat growth nationally, house prices are once again rising at their fastest rate in London – up 1.4% in the past month. This may be a promising a sign that the engine of the economy is getting back into gear post-Brexit, but it is also a result of the falling exchange rate which has tempted foreign buyers back into London, as well as the now chronic lack of homes on the market in the capital.

“The Government could, and should, step-in to support the market and boost housebuilding across the country, especially in the areas where it is most needed, such as London, the South East and East of England.”

Nick Davies, Head of Residential Development at Stirling Ackroyd comments: “While house prices have remained flat from the previous month for most of the country, in London they continue to rise. The capital is seeing the fastest monthly growth in house prices of any region. Homeowners in London should feel relieved that the current economic uncertainty has yet to impact the house prices. New build properties in London have seen a 23% upswing year-on-year, which is encouraging for developers, but emphasises that not enough new properties are being built. However, for those hoping to get their first foot on the property ladder, the dream of homeownership is more distant than ever.

“The majority of the growth in London’s house prices is coming from the more affordable parts of East London and the outer boroughs. In Gavin Barwell, the Housing Minister’s constituency, house prices have jumped 17% year-on-year – equivalent to £53,164 – this is almost double the average Londoners salary, highlighting the challenge he faces. As these boroughs are usually areas chosen by first time buyers, they’ve seen some of the steepest increases, rising 11% year-on-year in London. This means that most first time buyers in London fall into the 5% stamp duty band – a clear failing of a Government supposed to support homeownership. The Government should consider scrapping stamp duty or raising the tax bands, if they want to help Londoners achieve homeownership.”

Doug Crawford, CEO of My Home Move, comments: “Sustained growth in house prices shows that the market continues to shake off political and macroeconomic uncertainty. Despite the market having to weather several turbulent spells this year, such as changes to Stamp Duty Land Tax (SDLT) and the Brexit vote, prices have continued to grow faster than they did in 2015. For example, this September’s annual increase of 7.7% is greater than September 2015’s 5.3%.

“This continued growth is a testament to the robustness of the housing market and the strong fundamentals that underpin it. Demand for housing continues to outpace supply, which supports price rises. Furthermore, low returns on other traditional savings avenues means that bricks & mortar is seen as a good destination for investment.

“In the long term these strong fundamentals will continue to support a healthy and prosperous housing market. High levels of demand for both rental and owner-occupied accommodation will drive transaction figures and prices upwards, and our recently published forecast predicts the number of property transactions will rise by 20% by 2020.”

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