Transactions are falling at the fastest rate since the global financial crisis as a range of official data points to a drastic fall in demand for property.
Analysis of Land Registry figures for the 12 months to June, by property adviser London Central Portfolio (LCP), shows that transactions in England and Wales, excluding London, fell by 2.5% to 781,005 – the lowest level since 2013 and the fastest rate since 2009.
In prime central London, sales were down 13.1% annually and 12.5% lower than during the financial crisis, while there was a 4.2% annual drop in Greater London.
This has held back price growth.
Average prices in England and Wales, excluding London, were up just 0.3% annually in June.
In Greater London, average values were up just 1% annually and fell 0.2% in prime central London.
Naomi Heaton, chief executive of LCP, said: “Whilst many commentators are reporting that the regions are still seeing strong price growth, this has not been reflected in the overall picture for England and Wales.
“Transactions, in any event, are perhaps a better barometer of buyer sentiment. Changes to property tax and political uncertainty hit London earliest and hardest, but the rest of the UK has not been unaffected.
“Despite a 13% rise over the last quarter, annual transactions have fallen at the fastest rate since the global financial crisis, decreasing 2.5% this year to 781,005.
“This is the third successive year of falls with transactions 29.2% lower than before the crisis. Any economic fallout from Brexit may significantly worsen the picture.”
The figures were echoed by new Zoopla data that show growth in the supply of homes for sale is running ahead of transactions as demand weakens, resulting in sluggish house price growth especially across southern UK cities.
Its analysis found there are 1.3 units of supply new to the market for every sale agreed.
Before 2016, supply struggled to keep pace with sales with a ratio closer to 1 which it said created scarcity and a strong upward pressure on prices.
This has meant average house price growth across southern cities is running at the lowest level recorded since January 2012, Zoopla says, at just 0.7% in the 12 months to June.
In contrast, northern cities have registered 3.6% annual price growth over the same period.
Richard Donnell, research and insight director at Zoopla, said: “Robust demand from buyers continues to support house price growth in northern cities and Edinburgh.
“We expect regional cities outside the south of England to continue to out-perform, although there are early signs of weaker growth ahead in parts of the midlands as successive years of house prices rising faster than earnings is beginning to weaken demand.”
Separately, NAEA Propertymark’s June housing report shows a different picture, with agents reporting 308 registered house hunters per member branch, described as high for this time of year, while supply dropped.
The number of properties available per branch dropped to 37 in June from 41 in May and was down from 39 last year.
The number of sales agreed remained flat at nine in June, while the percentage of sales to first-time buyers was 26%, compared with 29% in June 2018.