Residential property transactions have fallen 9.8 per cent year on year, according to latest figures from the HM Land Registry.
In June 2016, the number of transactions was 961,048, dropping to 866,684 in June 2017. This is the lowest number since June 2013, when levels were at 686,961.
This was most marked among flats and maisonettes, which decreased the most, at 16.7 per cent year on year.
Moreover, according to the Office for National Statistics (ONS), the nominal value of residential property transactions in England and Wales fell 7.6 per cent over the same period, reaching £248bn, compared with £269bn in June 2016.
The figures showed that popular areas such as the London 2012 Olympic Park have seen an eight-fold increase in property transactions over the past two years, while outside of London, the volume of transactions was much lower.
Graph: Number of transactions by property type 1997 to June 2017 (ONS)
While some pockets of the UK remained buoyant, others saw greater price disparity. According to the ONS, the median price paid for residential properties in ‘middle-layer super output’ areas in England and Wales ranged from £29,000 (within County Durham) to £2,555,000 (within Westminster).
Shaun Church, director at mortgage broker Private Finance, commented: “From a median house price of £2.6 million in parts of Westminster to just £29,000 in County Durham, the astonishing range in house prices between small geographic areas highlights the vastly different experiences of homebuyers around the country.
“With average wages in Westminster not even double those in County Durham, yet house prices being 88 times higher, there are clear affordability challenges for those trying to join the property ladder in areas at the upper end of the house price scale.”
But while London did well in terms of price sustainability and transactions, overall, only 29 per cent of middle-layer, super output areas saw an increase in the number of property transactions since the previous year.
Overall, transactions in these areas are significantly lower than the 64 per cent recorded for the year from July 2015 to June 2016.
A statement from the ONS suggested this was largely due to new tax changes brought in during various Budgets, which may have caused a slowdown in buy-to-let transactions. It said: “This was the first time it has been below 30 per cent since year ending June 2009.
“Since the changes to Stamp Duty Land Tax rules came into effect on 1 April 2016, there has been a continued period of reduced property transactions.”
Mr Church added: “There has been a notable slowdown in residential property sales this year, with sales of flats and maisonettes worst affected. With these types of properties popular among buy-to-let investors, the decline in sales is likely to stem from recent stamp duty and other regulatory changes dampening activity in the property investment sector.
“However, the rest of the market is holding reasonably steady, demonstrating its resilience in the face of political and economic uncertainty.”
He said there was hope, however, for housebuyers, especially if the government fulfills its pledges to improve housebuilding efforts across the UK.
In his most recent Budget announcement, chancellor Philip Hammond told the House of Commons: “Put simply, successive governments over decades have failed to build enough homes to deliver the home-owning dream this country has always been proud of.”
He cited the coalition government’s Help to Buy scheme, which has helped more than 320,000 people buy a home, and the 1.1m new homes built since 2010, 350,000 of which fall into the ‘affordable homes’ category.
He pledged at least £44bn of capital funding, loans and guarantees to support the housing market, to “create the financial incentives necessary to deliver 300,000 net additional homes a year on average by the mid-2020s”.
Source: FT Adviser