House sales in the UK have fallen in the past year as a result of sky-high prices and a lack of suitable homes, new research shows. According to Lloyds Bank, property sales across England fell 7% in 2016 to 848,857, with levels a third lower than those of the last housing boom. All regions saw […]
House sales in the UK have fallen in the past year as a result of sky-high prices and a lack of suitable homes, new research shows.
According to Lloyds Bank, property sales across England fell 7% in 2016 to 848,857, with levels a third lower than those of the last housing boom.
All regions saw a decrease in sales in 2016 compared to 2015, with the largest fall in Greater London of 18% and 10% in the South East. Both East and West Midlands fared the best with just a 1% decline, followed by North West at 2%.
There was a general north-south divide, as over 80% of the towns that saw a rise in home sales in 2016 are in the North.
Brent and Berkhamsted recorded the largest drops in home sales in 2016, both falling by 30%.
Andy Mason, mortgage director at Lloyds Bank, said: “The recovery in the housing market has stumbled during the past year with sales declining in all regions. Despite record low interest rates and Government schemes, such as Help to Buy, sales remain significantly below the levels seen at the height of the last housing boom.”
Lloyds said that the average cost of moving as well as lack of available properties for those looking to move up the housing ladder or downsize were slowing down the market.
“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,” said Mason.
“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.”
Housing market activity is way below the 1.3 million sales recorded before the financial crash in 2006, with property sales over a third lower than a decade ago during the last housing boom (-34%).
Regionally, sales are lowest compared with 2006 in Greater London (-74,861 sales, -44%). The smallest falls have been in the East Midlands and Wales (both -28%).
The largest falls in property sales from 2006 were in Westminster (-63%), followed by Nelson (-59%) and Burnley (-58%) in the North West.
Despite the fall in property sales, the first-time buyer housing market continues to grow. In 2006, just over a third (36%) of all house purchases financed by a mortgage were made by first-time buyers.
In 2016, this proportion is estimated to have reached almost half (49%), the highest level since 1996.
High stamp duty costs are also stopping transactions, not just at the top end of market but in the trickle-down effect on the rest of the market.
