Sales of £1million plus London homes have plummeted

Sales of £1million plus homes have plummeted

Sales of £1million plus homes have plummeted - Credit: PA Wire/Press Association Images

Sales of homes in London worth more than £1million have plunged by nearly a quarter year-on-year, Land Registry figures show.

The capital saw a 23 per cent decline in sales in this bracket. Across England and Wales, 851 homes were sold for over £1million in January, a 19 per cent fall compared with January last year, when 1,049 properties in this bracket were snapped up.

Some recent reports have suggested that political uncertainty, with the possibility of a mansion tax, and affordability pressures have been taking some of the steam out of the property markets in London’s most expensive boroughs.

Stamp duty changes in December have made the tax more expensive for some buyers purchasing high-end homes. While the tax has become cheaper for the majority of buyers liable to pay it, the tipping point comes when homes are worth more than £937,500.

The Land Registry’s figures show that house prices in Kensington and Chelsea, where the average property is worth £1.29 million, have shown the slowest annual growth over the last year of all the London boroughs, recording a 5.2 per cent upswing.

Westminster was the only other London borough to see year-on-year price growth below 10 per cent, with a 9.9 per cent increase taking the average value to £999,687, while Camden house prices increased 12.7 per cent year-on-year to £830,743.

Matthew Pointon, a property economist at Capital Economics, said: “Uncertainty regarding the mansion tax has taken its toll on prices in prime central London.”

Across all price brackets, the number of completed house sales in England and Wales in January stood at 53,168, an 18 per cent fall compared with 65,175 in January last year.

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The figures were released as estate agents across the UK reported a lull in the market as house hunters await the outcome of the General Election, with the first-time buyer market in particular seeing a dip.

Less than one in four homes sold in March went to first-time buyers, according to the National Association of Estate Agents (NAEA). Its figures showed that 22 per cent of house sales in March involved people taking their first step on the property ladder, down from 30 per cent in February.

Overall, the NAEA said that demand for property is the lowest in a year. An average of 343 house hunters were registered per branch in March, down from 366 in February.

Nearly two-thirds (63 per cent) of estate agents reported a slowdown in the market as the election approaches, the NAEA said.

The NAEA said the supply of homes on the market has edged up to an average of 48 per estate agency branch, compared with 43 in February.

Mark Hayward, managing director of the NAEA, said: “We may have seen a slight increase in supply this month, but it is not an ongoing trend or a big enough jump to fill the gap for demand.

“Although our agents have seen the market cooling off ahead of the General Election, it will inevitably bounce back again at a rapid rate after May 7, so it is more important than ever that the party elected focuses on increasing the supply of homes.”