Southern England hit worse than the North in 2019 sales slump, research indicates.
New research has shown that the 2019 residential property sales slump largely affected the South of the UK. With 62% of areas that saw falling transactions in 2019 in the south of the country, most parts of the UK actually saw transaction volumes grow last year, the analysis by Southern Grove found.
Sales figures began to fall on an annual basis in May, after the country experienced a ‘Brexit wobble’. But much of the in sales occurred in Southern England and Southern Wales, skewing the overall picture
In the year to May 2019, Wales saw sales volumes climb 5.3% on average with nine of 22 local authority areas, 41%, seeing declines. In England, transactions increased by 2.9% on average but fell annually in 157 of 352 areas, 44.6%. In Scotland, just two of 32 local authorities, 6.3%, saw a fall in sales and the entire country actually recorded a 20.5% rise in transactions.
‘This is an eye-opening dissection of a collapse in sales that was clearly weighted towards the South. It’s a region that has seen huge price growth over the past five years so it’s no accident,’ said Andrew Southern, Chairman of Southern Grove.
‘Home owners in more expensive areas clearly felt it was better to ride out the storm, as any subsequent purchase would carry a hefty stamp duty bill at a time when they couldn’t be confident property values would be bulletproof in the medium term,’ he pointed out.
June’s HMRC figures showed sales volumes had dropped 11.3% in the 12 months to May 2019 as home owners and buyers shelved their plans pending Britain’s exit from the European Union on March 29. The analysis shows that of 406 local authority areas in the UK, some 168 or 41.4% saw transactions fall between May 2018 and May 2019 and 104 of these places, 62%, were in the South.
Worst affected areas included North Dorset with a fall of 35.4%, Harrogate down 33.9%, East Cambridgeshire down 29.6%, Broxbourne down 27.8%, East Hertfordshire down 27.4%, Slough down 27.3%, Camden down 27.2% and Hammersmith and Fulham down 25.9%.
‘In that situation, it is only human to wait and see what happens. High valuations give homeowners a taste for the piggy bank they think their home has become and they are often wary of doing anything that could jeopardise that peak valuation. It’s in this type of market that the hammer blow of stamp duty is most unhelpful. It’s a tax so punitive as to be totally counter-productive,’ Southern added.