Domestic Housing Market sees Massive Falls in Transactions and Prices

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Domestic Housing Market sees Massive Falls in Transactions and Prices

According to Q2 2016 data figures just released from HM Land Registry, residential housing markets across the UK were already suffering, pre-Brexit. The only exception was Prime Central London’s (PCL’s) mainstream private rented sector, where quarterly price growth was robust (+6.6%) despite recent tax changes and global economic uncertainty.

Demonstrating the distorting effect of recent changes in tax legislation, house sales volumes fell dramatically everywhere in Q2 following a rush of activity during the previous quarter, as buyers sought to be beat April’s 3% Additional Rate Stamp Duty (ARSD) deadline.

Outside Prime Central London
Greater London

  • Average Prices now stand at £558,082
  • Prices fell 7% vs Q1
  • 15,412 sales were registered, representing a 44.5% fall vs Q1

England and Wales

  • Average Prices now stand at £268,713
  • Prices fell 4.45% vs Q1
  • Just 115,895 sales were registered, a 30% fall vs Q1 and the lowest quarterly level on Land Registry record.

The UK’s domestic housing markets witnessed dramatic falls in prices and transactions in Q2, despite record low mortgage rates and Government efforts to decrease basic rate Stamp Duty. In Greater London as a whole, average prices fell 7% over Q1 to £558,082 with a corresponding 44.5% decrease in sales.

Record Low
Across the rest of the country, average prices fell 4.5% over Q1 to £268,713 with only 155,895 sales taking place, a 30% decrease over Q1 and the lowest quarterly number of sales on land registry record. This is down from a pre-credit crunch average of 245,173.

Naomi Heaton, CEO of London Central Portfolio (LCP), said

 “Whilst we have seen falls in mortgage rates and reductions in basic rate stamp duty for the majority of the market, the surge in prices experienced over the last few years in Greater London has stuttered. The market has suffered this year in the face of the new additional 3% Stamp Duty and a brewing new build market crisis which has seen a 43% fall in sales compared with last year.

“Likewise, registering the lowest number of sales since Land Registry records began in 1996, the fall in sales in England and Wales is very concerning, particularly given additional Government schemes to augment first time buyer numbers. With harsher salary caps on mortgage lending impeding buyers and Brexit uncertainty affecting sentiment, growth in both these domestic markets is expected to slow further across the rest of the year as buyers battle with the new normal.”

Prime Central London
Flats and Maisonettes

  • Averages Prices now stand at £1,319,654
  • Prices increased 6.6% vs Q1
  • 436 sales were registered, representing a 66% fall vs Q1.

Houses

  • Average prices now stand at £3,437,497
  • Prices fell 20.9% vs Q1
  • Just 62 sales were registered, representing a 70% fall vs Q1

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