The decline in sales transactions: have we seen this before?
11 June 2015 | William Carrington
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The short answer is “yes” but for different reasons, principally related to Black Monday in 1987 and Black Wednesday in 1992. Then, we witnessed a substantial slowdown in transactions which lasted fully until mid 1994. Additionally, the length of time taken to sell a property increased dramatically in which even the period of sole agency increased to at least 6 months and even a year.
You do not need to wait for the results of the recent election to see the impact that new Stamp Duty Land Tax (SDLT) rates and political uncertainty have had on the top end of the London market: like-for-like transaction levels are down by more than 18% compared with a year ago.
The argument to curtail the relentless rise in house prices in the capital was a strong one and the Bank of England was right to highlight a housing bubble as one of five biggest risks to the UK economy. However, it may be an over correction but we will need to wait out a seasonal year to see whether further measures need to be implemented.
To remind you, SDLT payable on a £2m property a year ago was £100,000, today it is £153,000, and in Scotland it is a whopping £198,350. Just twelve years ago it was £20,000.
With these high moving costs, it is no wonder that people are building on/in/up/down with what they have. Competition for instructions are sure to increase in the coming months.
About the author
William co-founded LonRes with Anthony Payne in 1999. He began his property career in the mid 1980s with a small family firm based in Knightsbridge. In 1992, he joined forces with Charles Boston, establishing Boston Carrington Pritchard based in Sloane Street, where he specialised in Landlord and Tenant work. William is a director of CLEA Ltd, which owns The London Magazine, and remains a consultant to Boston Radford Surveyors.