New figures have revealed a startling general decline in property sales across England and Wales.
According to numbers released by Lloyds Bank, property sales in England and Wales saw an average decline of 7% from 2015 to 2016. Additionally, 82% of towns included in the survey experienced a decline, with areas in London and the south of England faring the worst.
“The recovery in the housing market has stumbled during the past year with sales declining in all regions,” said Andy Moore, Mortgage Director at Lloyds Bank. “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.”
Despite these schemes, along with increased awareness surrounding the housing crisis and ‘generation rent’, housing has become much more of an issue in recent years. Indeed, the figures show an increase in property sales of 29% from 2011 to 2016. Greater London even saw an increase of 2%, but from 2015 to 2016 its property sales plummeted by 18%, the most significant decline nationwide.
The East and West Midlands fared much better, seeing only a 1% decline in property sales over the year. Lloyds’ figures also suggest a north-south divide, with the North seeing a decrease of only 8% compared to London’s 18%. Yorkshire and the Humber experienced a 3% decline, while the North West saw a modest decrease of 2%.
While these figures seem to warrant immediate action, the sad fact is that the lack of housing is too complicated an issue to solve with a quick fix. Earlier this year, the Communities Secretary, Sajid Javid, even admitted that the property market in the UK had become “broken”.
Andy Moore continued by suggesting that the figures “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.”
He also pointed out how potential movers can be put off by the actual cost of moving from one home to another. Lloyds looked at the “average cost of moving by category” from 2006 to 2016: over ten years the average cost, which includes stamp duty, conveyancing and home removal among other factors, rose from £8,790 to £10,994.
According to Mason, the average cost to move home in London is over £31,000!
“This new data showing that property sales are in decline is likely to be good news for tradesmen up and down the land, as demand for home improvements and renovations will increase,” said Stephen Jury, Spokesperson for Plentific.com.
This is certainly likely: the figures from Lloyds also highlight how the “first-time buyer housing market” is continuing to grow. In 2006, before the financial crisis, just 36% of home purchases financed by a mortgage were made by first time buyers. Surprisingly, this figure was estimated to have reached around 49% in 2016. With less new purchases being made by owners already on the property ladder, perhaps more are deciding to improve their homes rather than move on.
However, there has also been a greater degree of uncertainty in the market over the last year, owing to a number of significant recent developments in the UK.
“Last year, our research found that a large number of homeowners were discouraged from selling up and moving to a new home as a result of Brexit,” Jury continued. “With continuing political uncertainty and ongoing exit negotiations, the effects could be long lasting indeed: It seems that homeowners are still put off from the risks and expenses of moving house.”
“Lloyds highlighted that moving expenses in London can cost over £31,000, while outside the capital they can top £11,000. If you preferred to stay in your current home, these costs alone could easily go some way to pay for a new kitchen, bathroom or conversion project. Considering that a renovation or conversion could remove some of your biggest reasons for wanting to move in the first place, we have to ask ourselves: is it time to improve, not move?”
Philip is always on the lookout for properties that inspire. He knows how frustrating home improvements and maintenance can be, which is why he covers everything from loft conversions to radiator repair! Phil’s main interest is in modern properties, with a particular soft spot for skyscrapers.