London market slows significantly as Stamp Duty holiday ends

Prime London sales have slowed significantly, following the rest of the UK as the housing market feels the pinch of the post Stamp Duty holiday rush.

Following a record June, exchanges were down 22% last month in the prime market compared with July 2020, and 39% lower than the five-year July average (2015 to 2019) says property analyst LonRes.

The number of properties going under offer was down 16% year-on-year, however because last July marked the start of the Stamp Duty holiday, volumes were higher than usual.

Comparing ‘under offers’ with the five-year July average shows they were down just 1%.

New instructions were 23% lower than a busy July 2020 when Stamp Duty incentives and lack of activity over the first lockdown brought more homes to market, but 5% higher than in July 2019 and 6% above the five-year average.

Housing market

The zero-rate threshold ceiling has now dropped from £500,000 to £250,000 since 1^st July and will only last until the end of September.

Comparing prices achieved over the last three months shows a drop of 1% on the same period a year ago; Prime Fringe recorded the highest annual increase, up 4.2%, while average prices in Prime Central London increased 1.7%, with falls of 0.8% recorded in Prime London.

Marcus Dixon (pictured), head of research at LonRes, says it has been a quiet July for exchanges as sales which, under normal conditions, would have occurred this month were pushed forward into June.

He adds: “Unsurprisingly, the lower end of the market saw the biggest fall in activity between June and July. Only the top end of the market, above £5 million, recorded an annual increase as buyers here were perhaps less inclined to be part of the conveyancing scrum leading up to 30th June.”