Agents say Stamp Duty changes as big a factor as Brexit concerns
The latest figures from the Land Registry are showing that transaction levels fell sharply in the second quarter of the year around the time of the EU Referendum.
However, prices thus far seem to have not fallen precipitously with the average down by 9.2% compared with the previous three months. That still leaves the level for a home in the SW18 post code area at £711,689 up by 6.8% compared with the same period last year.
The highest priced sale so far this year was of a six bedroomed house on Lyford Road which went for £3,900,000, the last tim ethe property was sold was in December 1995 when the price achieved was £950,000.
Volume figures appear to show a 60% decline in transactions but there is likely to be an upward revision of the number of sales due to late reporting. However local agents say that the slowdown in the market pre-dated Brexit concerns and changes to the tax regime have had a big impact.
Vatche Cherchian, Regional Director, Portico London Estate Agents. "The increased Stamp Duty Land Tax for buy-to-let investors from April 1st has also had a major effect on the volume of transactions declining. SW18 has always been a hotspot for BTL investors, as there is huge demand from tenants who want to rent in the area due to the good schools, transport links and popular amenities. Unfortunately some investors have bene put off by the hike in SDLT."
Anecdotally, transaction levels remain low since the vote to leave the European Union but most local experts are not anticipating significant further price declines from these levels.
Mr Cherchian said, "Over the next year the prices should level off. Neighbouring areas such as Tooting, Streatham, Herne Hill and Dulwich have seen a larger increase in demand and prices over the last few years, as many buyers have been priced out of SW18 and forced to move further afield. This has also been a contributing factor in the decline in volume in sales as the top end prices become more unachievable."
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.“
If your agent is claiming to be marketing your property effectively and it doesn't appear on WandsworthSW18.com it may be time to choose a new agent.
The numbers below are subject to revision as is it usual that some properties are added late to the Land Registry's database.
Property Prices in Wandsworth SW18 (April - June 2016)
|Sales||Overall average||Total sales|
|Change in quarter||-47.3%||0.0%||-46.2%||-80.0%||-8.2%||-50.9%||-13.1%||-63.8%||-9.2%||-60.4%|
|Change in year||45.3%||-60.0%||-44.1%||-75.0%||-3.1%||-41.6%||4.5%||-64.3%||6.8%||-59.2%|
|Change in three years||48.8%||-50.0%||-37.5%||-92.3%||30.2%||-47.5%||28.4%||-64.3%||24.0%||-61.9%|
|Change in five years||83.7%||-50.0%||9.4%||-92.0%||57.4%||-49.0%||56.4%||-37.1%||44.0%||-46.2%|
|Change in ten years||134.7%||-71.4%||13.7%||-94.4%||104.4%||-60.6%||80.1%||-68.2%||81.2%||-68.1%|
Copyright notice: All figures in this article are based on data released by the Land Registry. The numbers are derived from analysis performed by wandsworthsw18.com. Any use of these numbers should jointly attribute the Land Registry and wandsworthsw18.com.August 17, 2016