UK homes outside London are selling faster than those in the capital for the first time in seven years.
Stamp duty changes, Brexit vote and price-to-income gulf slow capital’s market
By Judith Evans/ Financial Times
The reversal is the latest sign of how stamp duty changes, the Brexit vote and high price-to-income ratios in London have combined to put the brakes on the capital’s previously booming housing market. Homeowners are taking an average of 55 days to find buyers for their London properties compared with 46 days elsewhere in the UK when taken as a whole, according to data from Countrywide, the listed estate agency group.
The time it takes to sell a London home has increased by almost half from 38 days a year ago, making the capital a slower place to sell a home than the regions for the first time since 2009.
“Prices are beginning to slow in London for lots of reasons, such as the uncertainty around Brexit and the rapid rise in prices over time,” said Fionnuala Earley, residential research director at Hamptons International, part of Countrywide. “People are now realising they can expect less capital growth once they have bought. “Sellers are perhaps taking longer to appreciate that prices are beginning to slow.” Rightmove, the property portal, says a fifth of homes on its site have been on sale for six months or more.
While London homes are lingering for much longer on the market, buyers are closing in on those in Scotland and the East Midlands more quickly than a year ago. Scottish homes are taking on average 37 days to sell compared with 41 days in the same period of 2015.
The most expensive homes in London are proving the slowest to shift. Those costing more than £2m are taking 148 days, or almost five months, to find a buyer, compared with 71 days a year ago.
London house prices rose 10.4 per cent in the past year, according to Home track, but the rate of growth slowed to 0.1 per cent in August. Most surveyors expect London prices to drop in the next three months, according to Royal Institution of Chartered Surveyors data released .
The most expensive homes have been at the centre of London’s slowdown and prices per square foot in “prime” areas are down 8.3 per cent from their 2014 peak, the research firm LonRes said.Despite the price drop, the number of homes costing more than £5m that changed hands in the third quarter of 2016 was less than half the figure a year earlier, according to new LonRes data. Prime properties sold for an average of 90 per cent of their asking prices in the third quarter from 97 per cent two years before.
“It has swung much more towards a buyer’s market, and buyers are looking for quite chunky discounts,” said Marcus Dixon, head of research at LonRes. “In the run-up to the referendum a lot of sellers were not reducing prices but now they are realising they need to entertain lower offers.
“It is all about your perception of where the bottom of the market is — but there are some pretty good deals going on out there for people who are buying.”