Sales reportedly slow after rush to meet tax discount deadline
A semi-detached house on Dorlcote Road went for £4,375,000. Picture: Rightmove
September 29, 2021
Estate agents in the Wandsworth area are reporting a much quieter market over the last few months following a hectic time in the run up to the end of June.
The expiry of the government’s reduction in Stamp Duty meant that there was a rush of sales in the first half of the year, initially when it was thought that the discount would end in March and then again when it finally was withdrawn the following quarter.
This meant that it was a bumper time for estate agent offices in the area as the Wandsworth SW18 postcode are had a lot of properties in the price bracket for which the saving was most significant.
Sellers of larger properties in particular could significantly reduce their tax duty bill by accelerating the sale before 30 June.
So far this is not fully reflected in the Land Registry data as it is understood there is a backlog of up to eight to nine months in processing sales for publication of the details online.
Based on the sales reported so far the average sale price in SW18 was £771,759 in the second quarter of 2021, a 7.8% increase compared to the same three months in 2020 but down on the first quarter of the year.
Turnover rose substantially compared with the comparable period in 2020 but lockdown had meant that very few sales were possible at that time.
A Wandsworth based estate agent said, “The first half of the year was like a long-running party with little sleep to be had. Every transaction had a clock ticking on it and vendors were all anxious about meeting deadlines so the best thing we could do for them was to hide how panicked we were! In the event all our clients completed on time.
“Now comes the hangover. Most people who were thinking of selling this year will have done so in the first half. The Stamp Duty bonus brought a lot of new stock to the market that had been desperately starved of it but now, having had the feast, we have gone back to famine.
“My concern is that noises are already been made about the overheating market in other parts of the country but that is far from being the case in London which is seeing little upward momentum for prices and quite low volumes.
“The cap on what can be taken for housing for social care really favours the capital so we may need to be watching out for the government to offset this with something to fit with its ‘levelling up’ agenda.”
|Property Prices in Wandsworth SW18 (April - June 2021)|
|Change in quarter||17.1%||-77.3%||-6.1%||-60.6%||8.8%||-54.3%||-4.6%||-58.3%|
|Change in year||54.3%||66.7%||5.3%||44.4%||2.9%||39.1%||7.8%||41.7%|
|Change in three years||-11.7%||-50.0%||8.4%||-22.4%||-5.9%||-65.5%||7.9%||-57.0%|
|Change in five years||112.7%||150.0%||7.3%||-16.1%||-11.0%||-43.9%||4.2%||-35.4%|
|Change in ten years||132.6%||-80.0%||70.6%||-49.0%||63.3%||-39.6%||56.2%||-47.2%|
Source: Land Registry
Demand for large family houses continues to be relatively strong in the area with seven figure sums commonplace in transactions so far this year. The highest price paid in the second quarter was £4,375,00 for a six bed, semi-detached property on Dorlcote Road which changed hands for £4,375,000 having been bought by its previous owner for £2,450,000 in May 2013. A flat in Ensign House on Juniper Driver with a view of the river sold for £3,500,000.
A flat with a riverview in Ensign House went for £3,500,000
The average price of a property in the UK was £265,668 at the end of June according to the Land Registry a rise of 13.2% over the year and 4.5% over the month. London’s rise was well below this level with prices in the capital up by just 6.3% over the year. The North West by comparison saw a rise of 18.6%
Between May and June 2021, UK transactions increased by 74.1% on a seasonally adjusted basis as volumes recovered from lows seen during the lockdown.
The Nationwide’s House Price Index suggests that the market paused for breath in July with prices falling by 0.5% compared with the previous month.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “Annual house price growth slowed to 10.5% in July, from the 17-year high of 13.4% recorded the previous month. In month-on-month terms, house prices fell by 0.5%, after taking account of seasonal effects, following a 0.7% rise in June.
“The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6% a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.
“The tapering of stamp duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June (it will revert to £125,000 at the end of September). This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties. For those purchasing a property above £250,000, the maximum stamp duty saving reduced from £15,000 to £2,500 after the end of June.
“The stamp duty changes drove the number of housing market transactions to a record high of almost 200,000 in June as home buyers rushed to beat the deadline. This was around twice the number of transactions recorded in a typical month before the pandemic and 8% above the previous peak seen in March.
“For example, the number of transactions involving properties bought for £500,000 or higher increased by 37% over the 12 months to March 2021, compared to a rise of 2% for all properties. As a result, between Q1 2020 and Q1 2021 the share of transactions involving a property valued at £500,000 or above has increased from 12% to 18%.
“There has also been a shift in the composition of property types that have been transacting. Over the past six months the proportion of sales involving detached and semi-detached properties has increased, while the proportion involving flats has declined significantly.”
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