Transaction volumes in London are down by more than half compared with the period just before the financial crisis, and are also down nearly 50% measured year-on-year.
London agent Portico has analysed Land Registry data and found that transactions as of July, the latest available on the Land Registry, were 54% lower than the average monthly figure in the time leading up to the crash.
According to its research, the average monthly transaction volume in London in 2007 was 14,148. In comparison, in July this year there were 6,500 transactions in the capital.
While recognising the figures are five months old, the agent says it has not seen volumes increase since July.
On a yearly basis Portico says transactions have fallen from 12,481 in July 2015 to 6,500 in July 2016, a 48% drop.
Mark Lawrinson, regional sales director of Portico, said a price readjustment in the market could reinvigorate volumes at some point, making housing more affordable for first-time buyers, but warned this is a scenario unlikely to happen any time soon.
He said: “Transaction volume levels have remained critically low since April, down 60% in prime central London versus last year.
“With prices historically following volume decline, if this chronic lack of volume continues over next six months, we could be looking at 6–7% price decreases in prime central London which is likely to filter out to greater London.”
For too long we have been selling the ‘family silver’ to overseas buyers who see the London Property market in particular as a safe haven and a safe place to park your money. This has forced the price of housing in most of central London beyond what most people can afford.These foreign buyers often only occupy these properties for a short period of time in any one year. This causes problems for local retailers and shops.
It’s about time GCT tax is placed on properties which are not lived in on a permanent basis.
In Switzerland for example depending on your working status, it is only possible in some cases to buy a property if you live in it. For non-resident foreigners wishing to purchase property without a work permit you often have to apply for a license. Switzerland is still a place where people want to buy and this would still be the case in the UK.
Allowing the uncontrolled and unregulated purchase of property to anyone is causing problems for the youth of today.
It has to stop.
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It has stopped !
To be fair this isn’t a crisis. Londoners will start to sell up and probably in bigger volumes next year as they will see there isn’t any real prospect of house price inflation if they stay put for the foreseeable.
I predict a growing exodus of Londoners for the next three years.
I work 120 miles from London and I am seeing more and more coming my way. Just agreed a sale this morning from a couple from East London.
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Fortunately for you the ripple effect has not hit you yet, buyers will only be able to buy from you if they have sold, values are falling here and there are few if any buyers – if it’s going to be cheaper next year why buy now!. Simply, if they can’t sell they can’t buy. Hope the market keeps up for you. The side ways move has been going on for a long time here. Trading up from a four bedroom house at £2m to a slightly bigger version can cost you £1m extra – people just don’t have the money so they now move out of London.
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This is sensationalist.
The stamp duty legislation changes earlier in the year resulted in spike in transactions in March(~100% year on year) as people rushed to get in before the changes. Since then volumes have been lower as would be expected. The running total of transactions up to and including July is only 3% down on last year.
Taking July’s figures alone without this context makes a story out of nothing. Also, i’m not sure what purpose the comparison to pre-crash levels serves. Transaction volumes may never return to those levels but so what? There is a new norm which is growing steadily over the lats few year, perhaps a much healthier picture.
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Wishful thinking I fear.
The central London market is close to melt down. Agencies in deep trouble, staff being laid off, offices mothballed.
The outlook is bleak I fear. There needs to be a huge shift in how we allow ‘foreign buyers’ purchase property. Development like Battersea Power Station are a huge missed opportunity to create more affordable housing. Instead it will be a ghost town of empty flats. Even the foreign buyers understand these developments have limited re-sale values and now are beginning to choose to buy better stock in established areas such as Chelsea, Knightsbridge and Kensington.
However, even so there are a limited number of buyers who can afford to buy in these areas. Data from Knight Frank shows that the increase in SDLT for properties over £1.1m has hit transactions hard, particularly in the most expensive London boroughs.
The number of homes sold in K&C was down 12% in the 12 months to March 31st, this is following an 11% decline in 2015. Last year London contributed 44.6% of all stamp-duty receipts, while accounting for 12.3% of transactions.
The mistaken belief that there was an increase in investors buying to save money on SDLT, I don’t buy, and I would love to see the hard facts to support this claim. Due to the new treatment of how landlords are taxed, most investors we deal with are paying their debt down, not buying new stocks. Some agents used this ‘news’ to get press inches but bluntly it is rubbish in the majority of cases.
What happens in London, ripples out. Buyers today may have a nasty shock in 12 months time. The next couple of years while this government sorts out Brexit, we see what happens in the Italian, French and German elections, and how Trump will deal with things in the US, means a lot of people will be sitting on their hands.
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