London property: house sales slump in capital's 'sick' market
Activity levels among buyers and sellers has been steadily falling since the financial crash a decade ago, but is now hitting new lows.
Analysis of latest Land Registry data shows that there were fewer deals in 28 out of the capital’s 33 local authority areas between January and August.
The biggest declines in sales were recorded in Tower Hamlets, where they were down 22.5 per cent, Croydon, which saw a 15.4 per cent fall, and Westminster, which was 14.4 per cent lower.
Only a handful of boroughs saw an increase, led by Hammersmith and Fulham, which was up 11.9 per cent. The tiny City of London market recorded a 65.9 per cent leap.
Property experts said record low interest rates and high levels of employment meant that few vendors were “distressed sellers” forced to slash prices to clinch a sale.
But at the same time nervous buyers concerned about the impact of a potential no-deal Brexit are refusing to pay what they regard as inflated asking prices.
The result has been a gap that has left thousands of properties, particularly in central London, hanging on the market for many months or even years.
Naomi Heaton, chief executive of investors London Central Portfolio, said: “Most people in central London don’t need to sell, the cost of finance is so low. They are long-term holders and they have basically just shut up shop.”
LCP data suggests that transactions in prime central London have collapsed by more than half from 9,000 to about 3,700 since the frenzied peak of the market in 2007 on the eve of the credit crunch.
Across Greater London as a whole, sales volumes have barely recovered since the immediate aftermath of the financial crash and are 46 per cent down on 2007, according to LCP.
Joseph Daniels, chief executive of sustainable developer Project Etopia, which analysed the Land Registry figures, said: “Falling transaction levels in a city like London, where affordability is a critical problem, is a sign of a sick housing market that refuses to adjust.
“The picture in the capital is worse than across the rest of the country and things will come to a head here sooner rather than later.
“Vendors need to moderate their expectations but more importantly, policymakers must start building a meaningful number of new homes so accumulation of wealth ceases to be the market’s main long-term driver.”