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Property sales slump 7% in 2016

by: Carmen Reichman
  • 21/06/2017
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Property sales slump 7% in 2016
Property sales in 2016 were 7% lower than 2015 with London and the South East faring worst, according to research from Lloyds Bank.

There were 848,857 home sales in England & Wales in 2016, compared with 915,096 in the previous year, the bank found.

Sales were down in all regions, although Greater London and the South East saw the biggest falls with 20,660 (down 18%) and 23,422 (down 10%) fewer sales respectively.

The East and West Midlands fared best with just a 1% decline, followed by the North West (down 2%).

 

Recovery

However, despite the latest dip in home sales, the market is still better than five years ago when it started to recover from the financial crisis.

The number of sales in England and Wales as a whole has increased by 29% (up 188,386) from 2011-2016 with the majority of regions seeing increases of between 23% (South East) and 46% (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.

However, the property market has not recovered to the heights of the last housing boom ten years ago, with sales in England and Wales about a third lower (442,277 fewer sales) than in 2006.

Lloyds Bank mortgage director Andy Mason said: “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.

“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.”

 

Upswing for first-timers

Meanwhile, Lloyds found the first-time buyer housing market has continued to grow.

While in 2006 about a third (36%) of all house purchases financed by a mortgage were made by first-time buyers, by 2016 this proportion was estimated to have reached almost half (49%), the highest level since 1996.

There were also a number of towns that recorded a rise in sales. Retford in the East Midlands, for instance, saw the biggest rise in home sales with 15%, followed by Cannock in the West Midlands (12%).

Lloyds observed a general north-south divide, as more than 80% of the towns that saw a rise in home sales in 2016 were in the north.

Home sales across all towns and local authorities are still lower than in 2006. Biggleswade in the South East experienced the smallest fall in sales (down 2%) compared with 2006 levels, followed by Hinckley and Didcot (both down 4%).

The largest falls in property sales from 2006 were in Westminster (down 63%), followed by Nelson (down 59%) and Burnley (down 58%) in the North West.

Regionally, sales are lowest compared with 2006 in Greater London (down 44%), while the smallest falls have been in the East Midlands and Wales (both down 28%).

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