Larger homes not selling with agents blaming stamp duty changes and Brexit concerns

The latest figures from the Land Registry are providing the first indication of the extent of the slowdown in the local property market so far this year.

The number of sales reported in the second quarter of the year has fallen sharply, and although it is likely that this number will be revised up due late reported transactions being added, it is unlikely that turnover will be anywhere near previous levels.

Agents are blaming a combination of concerns about the EU Referendum and changes to Stamp Duty for the decline in the number of transactions. These latest figures only include sales up until 30 June just after the Brexit vote but anecdotally the number of transactions taking place in the area has remained minimal.

The average price of property sold in the SW15 post code area in the second quarter of 2016 was £642,599, down by 15.4% compared with the first three months of the year. However, this level is still up by 10% over the second quarter of 2015.

Once again the top end of the market saw relatively little activity with only four sales of detached houses being reported so far this year.

The most expensive of these was a detached house on West Hill sold by Wandsworth Council for £1,250,000 - described on the auction notes as suitable for redevelopment either into a pair of 5 bedroom houses or 6 self-contained flats.

The number of sales of flats dropped sharply. The majority of these sales were still in the SW15 2 post code sector which includes the modern riverside developments east of Putney High Street.

Local agent Allan Fuller is not all doom and gloom commenting, "Mark Carney has reduced the base rate, mortgages are as cheap as chips, there has never been better time to take a mortgage at incredibly low rates and lock in for as long as you can, we have seen more buyers registering recently than at any time this year. Sellers have had to be a little more realistic in their ambitions, but that just gets reflected in the price that they buy at. So in my office we are getting really for a busy September as more people return from holidays, and watching Team GB sweep the board at Rio and get down to the serious business of moving home again. The sunshine of an Indian summer could well burn off those clouds!"

Across the whole of London Prices rose by 12.6% over the twelve months to June bringing the average price up to £472,204. Prices rose marginally during the month of June.

For the UK as a whole there was an annual price increase of 8.7% which takes the average property value to £213,927.

Following a strong increase in sales in March, UK home sales fell by 55.4% in April 2016, recovering slightly in May and June 2016. The swings in volume are believed to be primarily due to Stamp Duty changes. This was mirrored in London where 14,783 sales were recorded during March but this fell to 4,368 in April.

The latest report from the Royal Institution of Chartered Surveyors (RICS) has concluded that housing market activity has softened with sales and interest from new buyers continuing to wane. They say sales and enquiries continue to display a negative trend in London - although expectations point to a more stable picture in the coming months. Stock levels in the capital are at record lows and new instructions have declined markedly. Across London, 42% more surveyors reported a fall in transactions; the fifth month of decline.

The RICS say that this reflects a continuation of a trend that started in March following the implementation of the tax surcharge on investment purchases. Anecdotal reports provided by contributors to their survey suggest both the tax change and the ongoing fall-out from the EU referendum are contributing to the current mood in the market. However, looking a little further out, London has seen a notable turnaround in sentiment for the year ahead, as confidence towards the outlook for transactions climbed to a seven month high.

Simon Rubinsohn, RICS Chief Economist, commented, “The housing market is currently balancing a raft of somewhat mixed economic news alongside the latest policy measures announced by the Bank of England, which have already begun to lower cost of mortgage finance. Against this backdrop, it is not altogether surprising that near term activity measures remain relatively flat. However the rebound in the key twelve month indicators in the July survey suggest that confidence remains more resilient than might have been anticipated.“

Copyright notice: All figures in this article are based on data released by the Land Registry. The numbers are derived from analysis performed by PutneySW15.com. Any use of these numbers should jointly attribute the Land Registry and PutneySW15.com.

August 19, 2016