Nationwide have revealed that London’s homes have increased in price by over half since 2007, with stamp duty revenues up by 2.2 billion
House price growth has slowed 0.8 per cent since July to just 2.1 per cent; more than half of the 5.6 per cent rise achieved last year. House prices have decreased 0.1 per cent month on month, but although prices fell between March and May, they have risen since June. The figures from Nationwide have prompted responses that the Brexit-weakened pound has caused buyers to tighten their purse strings.
House prices in north London have increased 5 per cent since the vote to leave the EU, reaching £754,831, a decrease of the same amount since June according to agent, Haart. Across London, however, prices have fallen by 0.5 per cent since June to a city-wide average of £555,397.
With London’s house prices on average 56 per cent higher than in 2007, the capital has been particularly impacted by the 3 per cent levy on second homes and revisions in the stamp duty charges, for which the revenues have risen to record highs. With London paying more than under the old slab system, revenues for the tax have increased to £12.8 billion in the year to the second quarter of 2017, up markedly from the £10.6 billion taken in 2007.
With the Brexit-bitten pound causing inflation to rise, the housing market has remained sluggish in the first half of this year, with the house price to earnings ratio climbing resulting from stagnant wage growth and a higher cost of living.
As a result, the number of residential property transactions in the year to June almost a third below that recorded in 2007. Agents have reported that stock is at a 30 year low, buyer enquiries are lacklustre and the number of new homes coming on to the market has remained poor.
However, some agents have rebuked this claim, with lettings agents in particular recording higher numbers of stock. This could be a result of more homes struggling to sell, and instead being put on the market to rent until the market picks up pace again.
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