Research into the severity of the London sales market crash has been published by Portico, which has 18 offices in the Capital.
The shocking report, which has just been released, reveals that sales volumes in London are now more than half those before the 2008 financial crisis and 48% percent lower than this time last year.
Portico says much of the downturn can be pinned on April’s Stamp Duty changes.
Before the extra 3% was introduced the number of properties sold in Westminster rose from 200 a month in February to over 500 in March as landlords rushed to buy prior to the deadline, before dropping dramatically to just 84 sales in May. Portico says the market has not recovered significantly since then.
But despite the sales slump, house prices in London have not dropped and instead have almost doubled since the financial crisis, increasingly from an average of £250,000 to nearly £500,000.
Portico says prices are likely to start dropping soon as the market in central London finally starts to react to low sales volumes. The company predicts likely price drops of up to seven percent, which it believes will then spread out to Greater London.
This reflects other recent market reports. Rightmove says prices in Greater London are down by 0.3% month-on-month, and 17 of London’s boroughs have recently recorded price falls.
“Unless action is taken to re-establish the natural movement of the whole market it’s likely this could be a serious issue and we will see prices fall,” says Mark Lawrinson, Portico’s Regional Sales Director, London (pictured, above).
“Ultimately a price re-adjustment in the market could re-invigorate volumes at some point, making housing more affordable for first time buyers, but as it stands this is a scenario unlikely to happen any time soon.”