LONDON — “The recovery in the housing market has stumbled during the past year with sales declining in all
regions,” according to Lloyds Bank.
New research from the lender shows that house sales fell by 7% last year, with the biggest decline in London where property transactions dived by 18%. Across the south-east of England, sales declined by 10%.
848,857 homes were sold in England & Wales in 2016, according to Lloyds’ research, compared to 915,096 in the previous year. At the pre-financial crisis peak, as many as 1.3 million homes were sold each year in Britain.
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.”
Property sales in 2016 were 34% below where they were in 2006, the height of the last property boom. In London, sales are 44% below where they were in 2006.
Mason said: “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.”
Within London, sales fell by 30% in the borough of Brent, 29% in Newham, 28% in Harrow, and 26% in Hackney.
Prices remain close to all-time highs, which can make moving prohibitively expensive. The average house price in Britain is now £220,706, according to Halifax, up 3.3% over the past year. Changes to Stamp Duty introduced last April have also taken some of the momentum out of the market. Average Stamp Duty costs increased by 17% over the last year, Lloyds says.
While sales are down across the country, the first-time buyer market is growing steadily thanks in part to government support through schemes such as Help to Buy. 49% of all house purchases financed by mortgages in 2016 were first time buyers, the highest proportion since 1996.
Some areas also saw an increase in activity last year. Sales grew by 15% in Retford in the East Midlands and by 12% in Cannock in the West Midlands.