It is well recorded that the property market has been slowing in London, but the latest analysis report suggests that the market in England and Wales is not faring much better than the capital.
There was nominal price growth of just 0.1% in the month of October and growth of 2.7% on an annual basis, taking the average price to £264,987, according to the latest monthly report from LCP.
It also points out that transaction levels throughout England and Wales have also fallen by 0.7% across the year and are now at 806,403.
New build prices stand at £292,985 representing a 14.9% premium over existing stock while sales in this sector have increased annually by 5.1%
‘Whilst most of the properties in England and Wales have not been as heavily impacted by the recent changes to tax legislation as London, it appears the political climate surrounding Brexit has created considerable uncertainty,’ said Naomi Heaton, chief executive of LCP.
‘This has resulted in a fall off of activity, exacerbated by lack lustre price growth which deters potential sellers from putting their property on the market. It is unlikely that any significant reversal will be seen until there is more clarity over Brexit,’ she pointed out.
The report also shows that whilst transactions in the new build sector have increased by 5.1%, this may not be sustainable at the 14.9% premium it currently commands compared with older stock. New build sales currently only amount to just 93,329 transactions.
In the prime central London property market growth is slowing, although year on year prices have increased by 4.2%, largely due to the top end of the market, taking the average price to £1,870,774.
But sales fell by 15.4% and are down over 40% compared with 2014 while new build average prices now stand at £2,846,856, representing a premium of 61.1% over existing stock.
New build transactions fell by 8% across the year.
In Greater London the market is more subdued. Prices increased by just 0.2% month on month and by 0.8% year on year to an average, excluding new builds, of £631,987 while sales continue to fall, down 5.6%, which the report says is due to higher taxes and continued uncertainty.
New build transactions show far greater falls, down 15.5% year on year but prices in this sector are an average of £784,351, a 21% premium over existing stock.
The report also points out that transaction levels continue to have a very real effect on London estate agents. Foxtons have closed their flagship office on Park Lane as part of a cost cutting exercise. Moore Stephens reported in July that 27% of high street estate agents are struggling to survive.
‘As the prime central London market has seen the most dramatic fall in transactions across the UK over the last few years, it is likely that it will not be the last we hear of this in the coming months,’ Heaton said.
‘It has been hard to avoid the incessant brouhaha around the Brexit negotiations over the last few weeks. We could expect property transactions to remain at very low levels until there is more clarity,’ she explained.
‘Nevertheless, we are seeing increased activity in PCL as price discounting seems to have reached a level which investors are finding sufficiently compelling to re-enter the market,’ she added.
