House sales fall but flats remain most popular sector of the local market

The average price of a home sold in SW15 during 2015 fell by 10% at a time when the rest of London was seeing a double digit increase. The fall seems to have more to do with the changing make up of the market. Sales of flats rose to over 70% of the properties sold in the area for the last three months of the year.

Flats in isolation actually saw a rise in price over 2015 with the sale of units in Putney Wharf boosting the average but with a lower proportion of houses sold at a lower average price this resulted in a lower average price for all properties of £689,537.

There was still buying interest at the top end of the market towards the end of 2015 with Lynton Lodge a five bedroom Victorian villa on the Upper Richmond Road changing hands for £3,125,000. The Medical Centre site, also on the Upper Richmond Road was sold for £5,900,000.

Property prices across London rose by 12.4% in 2015 according to the Land Registry bringing the average price of a home in the capital up to £514,097. This was the highest rate of increase in the country.

The indications are that 2016 has started on a more positive note. Local estate agent Allan Fuller commented, "For us the year has started extremely well and positively. We have taken on more property for sale, and seen strong demand. So far we have experienced a 30% increase in the number of sales agreed compared to the same period in 2015."

On the issue of the impact changes to stamp duty are having on the market Allan says, "There are distortions created by the stamp duty changes that we have had so far and those to be implemented in April. The considerable increase in duty for property over £935,000 really began to hit hard above £2,000,000 if someone is buying after 1 April as a second home. For example at £2,750,000 on any property currently stamp duty is £243,750, but when the changes take place if purchase is for a second home or investment it adds 3% to each band above 125K, so then it is £326,250! Even in Putney that still gets you a decent small flat!"

Allan continued, "We have certainly seen a strong demand from investors wanting to beat the stamp duty increase, whilst at the same time we have more first time buyers, especially in the flat and house market up to about one million. Quite probably after 1 April investors will tail off but the lure of property, and its greater appeal over other forms of investment will still mean that plenty of people with money to invest will want to put their funds in to property."

The average property value in England and Wales was up by 6.4% £188,270. Monthly house prices rose by 1.2% since November 2015.

Sales and repossessions during October 2015, the most up-to-date figures available, show that the number of repossessions in London fell by 71%. The London housing market has seen a fall in newly agreed sales for a third month in a row according to the latest RICS UK Residential Market Survey. Despite an increase in demand across the capital 2% more surveyors have seen a fall in newly agreed sales over the last month, adding to the picture from October and November.

Their report for December 2015 has shown that demand for new properties has reached a three-month high, with Chartered Surveyors citing a rush to beat April’s stamp duty rise as the reason.

From April, buy-to-let investors will be required to pay 3% more in stamp duty charges than residential buyers looking to purchase the same home. Since the Chancellor announced these measures in the Autumn Statement last November, 10% more Chartered Surveyors in London reported a rise in new buyer enquiries but with new instructions flat prices are continuing to rise - average sales per surveyor are at just half of what they were in June 2014.

RICS Chief Economist, Simon Rubinsohn said, “The housing market has experienced an unusually buoyant December. Those in the industry have been speculating that this is the result of the Chancellor’s announcement last November. Potential buy-to-let investors are looking to pick up properties before the increased stamp duty levy comes into force in April. If that is the case, then we can expect to see the housing market heating up further over the next few months.”

The survey also predicted that house prices in London look set to rise by a further 5% per annum in each of the next five years, compared to a UK average of 4.5%, with 57% of contributors in the capital believing that property was either ‘expensive’ or ‘very expensive’.

A net balance of 25% of respondents reported that London house prices had risen since November, substantially lower than the national average of 50%, however price expectations remained strong with a 30% more London surveyors predicting a rise rather than fall in prices over the coming three months.

Copyright notice: All figures in this article are based on data released by the Land Registry. The numbers are derived from analysis performed by PutneySW15.com. Any use of these numbers should jointly attribute the Land Registry and PutneySW15.com.

February 17, 2016