UK residential property prices and transactions drop
The UK’s domestic markets witnessed falls in price and transactions in the second quarter of 2016.
This is despite record low mortgages rates and government efforts to decrease basic rate stamp duty, according to new HM Land Registry data released based on actual property sales (rather than mortgage agreements).
Sales volumes fell dramatically across the board in the second quarter following a rush of activity during the previous quarter, as buyers sought to beat April’s 3% stamp duty insrease deadline on additional properties.
The data shows that residential markets across the UK were already suffering before the Brexit vote because the second quarter finishes at the end of June, only one week after the vote.
In Greater London, average house prices stood at £558,082 in the second quarter, representing a 7% decrease from the first quarter. Overall, 15,412 sales were registered in the second quarter which is a 44.5% fall compared with the first quarter.
In England and Wales, average house prices stood at £268,713 in the second quarter, falling by 4.5% compared to the first quarter. There were 115,895 sales, which represents a 30% fall compared with the first quarter and the lowest quarterly level on Land Registry record.
The only exception was Prime Central London’s private rented sector, where quarterly price growth was robust at 6.6% despite the recent tax changes and global economic uncertainty.
Commenting on the data, Naomi Heaton, CEO of specialist property investment company London Central Portfolio, says: “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 brewing newbuild market crisis which has seen a 43% fall on sales compared with last year.”