Sales fell across most of England and Wales last year, but first time market robust
Over 80% of towns in England and Wales experienced a fall in sales last year but first time buyer numbers continue to grow, according to the latest research.
Overall sales were down by 7% in 2016 with all regions recording a fall, led by a decline of 18% in Greater London, followed by a fall of 10% in the South East. The East and West Midlands fared the best with sales down just 1% and the North West down only 2%.
The analysis report from Lloyds Bank says that despite the recent dip in home sales, there has been an improvement compared to five years ago when the market started to recover from the financial crisis. But the market has not recovered to the heights of the last boom a decade ago.
The number of sales in England and Wales as a whole increased by 29% from 2011 to 2016 with the majority of regions seeing increases of between 23% in the South East and 46% in the North West. The exception, and the worst performer by some distance, was Greater London with a rise of just 2% in the past five years.
But, even with the fall in property sales the first time buyer housing market continued to grow. In 2006 some 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 at 49%, the highest level since 1996.
‘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,’ said Andy Mason, mortgage director at Lloyds Bank.
‘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,’ he explained.
Despite the overall decline in sales some markets, amounting to 18%, recorded some improvement in sales activity between 2015 and 2016. Retford in the East Midlands saw home sales increase by 15% followed by Cannock in the West Midlands with a rise of 12%.
There was a general north/south divide, as over 80% of the towns that saw a rise in home sales in 2016 were in the north. Brent in Greater London and Berkhamsted recorded the largest drops in home sales in 2016, both falling by 30%.
The research shows that the property market has not recovered to the heights of the last housing boom 10 years ago, with property sales in England and Wales a third lower than in 2006. Regionally, sales are lowest compared with 2006 in Greater London with a difference of 44% while the smallest falls have been in the East Midlands and Wales, both down 28%.
Home sales across all towns and local authorities are still lower than in 2006. Biggleswade in the South East saw the smallest fall in sales at 2%, followed by Hinckley and Didcot, both down 4%.
The largest falls in property sales from 2006 were in Westminster with a decline of 63%, followed by Nelson down 59% and Burnley down 58%.
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