First-time BuyerJun 21 2017

House sales slump across England and Wales

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House sales slump across England and Wales

House sales dropped by 7 per cent in England and Wales last year and remain a third lower than they were a decade ago, according to Lloyds Bank research.

Greater London witnessed the steepest decline with an 18 per cent fall in sales, while the south east experienced the next largest drop of 10 per cent.

The capital was also by far the worst performer over the long term, with just 2 per cent growth since 2011 compared to 23 per cent plus in other regions.

The strongest-performing regions in 2016 were the east and west Midlands, which only experienced a 1 per cent decline, followed by the north west, which saw a 2 per cent fall.

Evidence of an emerging north south divide in the property market continued to grow, with more than 80 per cent of the towns that saw an increase in home sales in 2016 located in the north.

Despite the overall downward trend, first-time buyer activity continued to increase and accounted for almost half (49 per cent) of house sales financed by a mortgage – up from just over a third (36 per cent) in 2006 and the highest level for more than two decades.

Property sales and % changes by region, 2006-2016

 Sales 2006Sales 2011Sales 2015Sales 20162006-2011 % Change2006-2016 % Change2011-2016 % change2015-2016 % change
         
North70,77633,16244,78141,088-53%-42%24%-8%
Yorkshire & the Humber124,14355,76579,72477,384-55%-38%39%-3%
North West150,07566,01998,78096,552-56%-36%46%-2%
East Midlands103,23752,15675,37374,547-49%-28%43%-1%
West Midlands115,77256,40281,72880,921-51%-30%43%-1%
East Anglia60,68334,22744,30342,213-44%-30%23%-5%
Wales57,88530,30842,90541,610-48%-28%37%-3%
South West136,21374,405105,09896,446-45%-29%30%-8%
South East303,481165,680227,345203,923-45%-33%23%-10%
Greater London168,86192,242114,66094,000-45%-44%2%-18%
England & Wales1,291,134660,471915,096848,857-49%-34%29%-7%

Andy Mason, mortgage director at Lloyds Bank, said: “The recovery in the housing market has stumbled during the past year with sales declining in all regions.

“Despite record low interest rates and government schemes, such as Help to Buy, sales remain significantly below the levels seen at the height of the last housing boom.

“The decrease in the amount of people moving home could be caused by movers not being able to find the right home, in the right location or those who don’t have enough equity in their current home to put down as a large enough deposit for their next mortgage. 

“Add to this that the average cost of moving home is close to £11,000, with costs in London over £31,000 and these factors make it more challenging for those looking to move home.”

Alan Lakey, partner at Hertfordshire-based Highclere Financial Services, said he expected the picture in the south east to get worse in the near future.

“One reason is the substantial increase in property values in London in particular, partly as a consequence of foreign money and because it is an in-demand area,” he explained.

“The big problem on the horizon is we are going to have rate rises. I don’t think we have done one non-fixed rate mortgage, but I know many people who have taken out trackers, and when rates go up these people are going to suffer big time.

“It is going to mean these people can’t consider moving up and some of them can’t afford their existing mortgage so they will sell, and as a consequence we will see a knock-back - not just across London, but in London it will be the most obvious.”

simon.allin@ft.com