Residential sales are at their lowest since the introduction of Additional Rate Stamp Duty (ARSD) in 2016, as transactions in England and Wales have fallen by 15.4 percent in the last month and 12.6 percent in the last quarter, according to London Central Property's LCPAca Residential Index June 2018 report.
The average house prices in England and Wales fell by 0.3 percent in April, with the total quarterly fall being 0.2 percent, and prices now stand at £285,082. New build transactions also fell (18 percent) and now represent a 9.9 percent share of the market, which is down from the highest share of 14.4 percent in June 2016.
In prime central London average property prices, excluding new builds, fell by 2.9 percent in April, after the record high in February, and prices now stand at £1,843,782. All transactions fell by 7.6 percent to 951 in the quarter, which is only just above the low rates of 2009, the year of the global financial crisis.
Despite these decreases, the prices of new properties have risen by 31.9 percent and have a 48.2 percent premium over existing stock.
In Greater London, prices have remained nearly static, with a 0.2 percent increase in the last month, meaning that the average price is now £609,965. All transactions have fallen by 7.9 percent over the quarter and 15.3 percent over the last month, meaning that transaction levels are at their lowest since the introduction of ARSD.
While new properties have increased by an average of 2.5 percent, the sales of these in the last quarter fell by 18.5 percent. The premium for new properties over existing stock is currently 10.7 percent.
Naomi Heaton, chief executive of LCP, commented: “This large drop in transactions is difficult to explain, as there is no obvious single external factor that has contributed to this marked reduction. However, economic uncertainty around brexit and a weak market may be encouraging buyers and sellers to sit tight.
“With the multitude of taxes that residential property has been hit with in the past six years, coupled with the uncertainty around brexit, confidence in the market appears to be disappearing quickly. The government is going to need to find some way of reassuring the nation soon, otherwise it is unlikely there will be any change in sentiment this side of March 2019.”
The LCPAca Residential index provides a dataset, tracking residential property prices and transactions within England & Wales, Greater London and Prime Central London. It is based on every transaction for full market value recorded by HM Land Registry in England & Wales, including prices of properties bought with cash and new builds.
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