The property market in England and Wales has been “shattered” in the 12 months since the government introduced its stamp duty reforms, new research has revealed.
According to Nested, transactions have fallen by 19% across England and Wales in the past year. In London the impact has been even more severe, with transactions falling by 35%.
Matt Robinson, CEO of Nested, said: “The evidence is now crystal clear – the government’s Stamp Duty Land Tax reforms shattered the property market.”
Since April 2016, property investors looking to buy a second home have faced a 3% stamp duty surcharge as part of the government’s plans to curb the buy-to-let market and free up property for first-time buyers.
Nested’s Market Efficiency Monitor tracks the health of the property market on a quarterly basis using data from Land Registry and Zoopla.
It also revealed that there has been a significant slowdown at the top end of the market, with the vast majority of listed properties valued at over £500,000 remaining unsold.
Only 9% of properties above £2 million are under offer, while only 18% of properties between £1 million and £2 million are currently under offer.
The research found that 41% of properties priced under £500,000 are currently under offer, suggesting that the lower end of the market is functioning much more efficiently than the higher end.
London
In London the property market is split between East and West. Higher valued properties in West London have slowed down the entire market in this area’s postcodes, with just 15.4% of properties under offer.
However, the more affordable east of the capital remains a hotspot for first-time buyers and second steppers who are continuing to put down offers, lifting the number of under offer properties to 28% in those postcodes.
It is bad news if you are looking for a quick sale in the capital, with nine out of 10 sellers in London failing to secure an acceptable offer on their home in the first 30 days.
Of the properties in the UK placed on the market in the last 30 days, only 15% have received an accepted offer. In London the situation is even worse, with only 10% of properties going under offer within 30 days.
The data highlights the problem now facing sellers across the country and shows that those looking to sell high value properties have next to no hope of securing a quick sale, unless they explore alternative solutions.
The problem becomes more severe the higher the value of the property, with the prime market practically dead in terms of buyer interest. Just 4% of UK properties valued above £2 million have received an accepted offer in 30 days.
These high value properties fare even worse in London, where only 3% are under offer within the first 30 days.
Robinson said: “Anything above £500,000 outside of the capital just isn’t selling. Brexit hasn’t helped the situation but the data shows that the government’s stamp duty tinkering has stalled the market. This may have slowed rising house prices, but it has also stopped sales going through and has left many people stuck in their current property, unable to move up the ladder.
“Policy-makers need to look at how the market functions and find ways to increase fluidity in the system. Everyone will gain if we can open the floodgates on the supply of properties and loosen up the market so it is easier and more cost effective for people to buy and sell.”
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