Lloyds says London property sales are down, so which figures should we believe?
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Sales in London have taken the biggest dive in the country according to Lloyds Bank, but with HMRC painting a different picture experts warn to take the numbers with a pinch of salt
Property sales fell 7 per cent in 2016 compared to the previous year, reveals new figures from Lloyds Bank.
London sales fell 18 per cent, or 20,660 sales fewer than in 2015, with every London borough across the board experiencing decline.
Since 2011, transactions rose just 2 per cent making the capital the worst performer in the country.
Regionally, Brent recorded the largest drop in 2016 at 30 per cent, whilst 80 per cent of towns that saw a rise last year were located in the north of the country.
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Since the pre-crash 2006 housing market, sales in greater London have fallen 44 per cent with the City of Westminster diving 63 per cent.
Across all regions in England and Wales sales fell 34 per cent.
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Andy Mason, mortgage director at Lloyds Bank, commented: “The decrease in the amount of people moving home could be caused by movers not being able to find the right home, in the right location or those who don’t have enough equity in their current home to put down as a large enough deposit for their next mortgage.
“Add to this that the average cost of moving home is close to £11,000, with costs in London over £31,000 and these factors make it more challenging for those looking to move home.”
However, Lloyds figures are contradicted by those of HMRC that show transactions in 2015 and 2016 increasing from 1,105,380 to 1,110,850 respectively on a non-seasonally adjusted basis.
Lloyds claims there were 848,857 home sales in England and Wales in 2016, compared to 915,096 in 2015.
So with figures volatile, can we give a representative picture of the market?
As so often in the world of property, agents say it might be best to take the figures with a pinch of salt.
“I think looking at reports from the likes of Halifax, Nationwide, RICS, Land Registry, HMRC, ONS, HPI amongst countless others can be extremely confusing for people,” says Camilla Dell, managing partner at buying agent Black Brick.
“The stats often use different sets of data and often conflict one another.”
Dell argues that agents like herself can offer a clearer picture of the market since they know what is happening on the ground.
The introduction of the 3 per cent levy on second homes in April muddied the waters, she says.
“The introduction of SDLT2 in April last year caused a surge of buy to let transactions to take place before the change came in, and then we saw a drastic drop off in activity post the change,” Dell observes.
“I concur that generally speaking since stamp duty went up in December 2014 we have seen a drop off in the volume of transactions taking place across London in all price brackets.”
She adds that properties in the £1.5 million plus price bracket have been disproportionately affected.
HMRC’s seasonally adjusted figures for 2016-17 are 1,155,310, nowhere near the 1,473,950 recorded in the UK in 2007-8.
Its latest figures for May 2017 also show a drop from 103,610 in April to 100,170.
“Overall we expect the volume of transactions taking place to remain well below previous market booms, with concerns around Brexit, a hung parliament and continued stamp duty, IHT and CGT effects continuing to hold back the market, particularly at higher price points.”