Property market in England and Wales sees lowest price growth since 2013
Prices in England and Wales, excluding new build, fell by 1.4% month on month in March and were down 2.6% on a quarterly basis to an average of £254,196, according to the latest index.
Year on year prices fell by 2.9%, the lowest annual figure since 2013, the data from the London Central Portfolio index shows. Sales also fell. Annual transactions were down by 0.8% and quarter on quarter they fell by 14%.
In the new build market prices increased by 3.6% to £307,692, a 15.1% premium over existing stock and sales increased by 5.2% year on year but quarterly they were down significantly by 24.3%.
Naomi Heaton, chief executive officer of LCP pointed out that average prices have fallen every month since last September. ‘The Brexit wobbles that have been evident in the capital for some time are now impacting on England and Wales,’ she said.
‘Buyers’ faith in the market has waned and sellers are beginning to question whether now is the best time to make a move. In previous market cycles, London has often been an early indicator of what was to come for the rest of the UK. This may well presage more bad news to come for the domestic market,’ she added.
In Greater London average prices, excluding new build, were £624,343, up 2.6% month on month but up just 1.4% year on year. But new build price growth is much stronger, up 15.2% year on year to ££691,452 and a 21.5% premium over existing stock.
Sales in the existing market fell by 3.4%, lower than at the European Union referendum in June 2016. However, new build transactions are falling much faster than existing stock, at a rate of 18% annually.
‘This cements the long-term trend of falling transactions with a drop of 3.4% over the year. They are now 24.7% lower than in June 2016, when the EU referendum took place. It illustrates the devastating impact the ensuing uncertainty has had on the property market, coupled with numerous tax hikes since 2014,’ Heaton pointed out.
‘If the current cross-party talks yield a compromise which can be ratified, then the prospect of a swift exit is still on the table. If not, we will see an extension of the limbo that not just the London housing market finds itself in, but the UK economy as a whole, with significant negative implications,’ she explained.
In the prime central London market prices fell by 3.7% on a quarterly basis, but year on year were up by 1.8% to an average of £1,848,282 and annual transactions remain just above the record low seen the previous month, down 15.7%, but quarterly sales were up by 18.3%.
New build average prices in the prime central London market increased to £2,377,521, a 60.8% premium over existing stock but sales fell by 18% year on year, the data also shows.
Heaton explained that in the run up to the initial Brexit deadline of 29 March, shrewd buyers and investors pushed through deals whilst levels of competition remained subdued and sterling weak. As a result, transactions increased 18.3% in the first quarter of 2019.
‘It had been anticipated that following Brexit there would be a clear roadmap for the UK to leave the European Union engendering a market revival. However, subsequent delays to the departure have created more uncertainty. This is unlikely to change materially until a clear decision is in the offing,’ she concluded.