London sales transactions are at an all-time low, according to the latest Land Registry data analysis by Portico London estate agents.
The data shows there were just 55 transactions in the whole of the Westminster borough in February this year*, the lowest ever number recorded by Land Registry open data, and 60% lower than in February 2009 immediately after the last market crash.
Portico’s research shows that there is a clear correlation between General Elections and sales transactions, hence the agent forecasting sales volumes to further decline until the General Election vote on June 8th.
Historically, low levels of sales transactions in central London have pushed people further out of the capital, but Portico’s data shows falling volumes are now a problem across the whole of London.
There were just 105 sales transactions in the south London borough of Wandsworth** this February, compared to 370 the year before, a staggering 72% decrease year on year. Likewise, Land Registry data shows there were just 82 sales transactions recorded in the east London borough Redbridge in February, compared to 260 the year before, a 68% decrease year on year.
According to the agent’s research, the market should experience a spike of activity post-election however, when certainty in the market is restored. After the last election in 2015, Wandsworth and Westminster experienced a 28% average increase in sales transactions in the three months post-election, and Redbridge saw an ever bigger 34% average jump in activity.
Robert Nichols, Managing Director, Portico, says: “Currently, transaction volumes, or the number of homes being bought and sold in the capital are at an all-time low. The drop in transactions is in part explained by a big jump in sales in the run-up to April last year, when the change to stamp duty taxes came into effect, followed by an immediate fall. Since then, volumes have dropped to historic lows, and Theresa May’s decision for a snap general election will further subdue the market.
“We are expecting to see some improvement in volume post-election, but at best we expect volume to track at -5% year on year to summer 2016, when volumes failed to recover after the stamp duty changes.
“We cannot say for certain what impact a boost in market activity will have on property prices, but historically there has always been a slight increase. If we look at the last election, house prices rose by 2.4% in Wandsworth in the three months following the vote, 4.6% in Redbridge and 1.7% in Westminster. Similarly, in the election before that in 2010, property prices rose by 1.8% in Wandsworth, 2.5% in Redbridge and a staggering 19% in Westminster in the three months after the election.”
Guest post by Portico estate agents.