The housing market is slowing in England and Wales with average prices of existing homes rising just 0.3% year on year, the weakest performance since 2011, according to the latest analysis.
Month on month prices were up by 0.9% and sales fell by 2.5% year on year, the fastest fall since 2008, the report from London Central Portfolio (LCP) shows, taking the average price to £255,050.
But new builds are bucking the trend in the 12 months to June 2019, with annual average prices up 4.4% to £303,977, a 15.3% premium over existing stock while sales increased 5.8% year on year.
‘Whilst many commentators are reporting that the regions are still seeing strong price growth, this has not been reflected in the overall picture for England and Wales,’ said Naomi Heaton, chief executive officer of LCP.
‘Transactions, in any event, are perhaps a better barometer of buyer sentiment. Changes to property tax and political uncertainty hit London earliest and hardest, but the rest of the UK has not been unaffected,’ she pointed out.
Despite a 13% rise over the last quarter, annual transactions have fallen at the fastest rate since the Global Financial Crisis (GFC), decreasing 2.5% this year to 781,005. This is the third successive year of falls with transactions 29.2% lower than before the GFC. Any economic fallout from Brexit may significantly worsen the picture,’ she added.
When it comes to Greater London, the average price of an existing home increased by 1.7% month on month to £624,241, the strongest performance over the year and are 1% above a year ago. But sales fell by 4.2% and are 27.1% lower than at the European Union referendum in June 2016.
In the new build market prices increased by 6.3% to £745,598, an 18.3% premium over old stock. However, new build transactions continue to plummet, down 17.5% in Greater London.
Heaton explained that whilst there are signs of an improving market, London property faces further headwinds and she warned that the new Prime Minister Boris Johnson’s stance on a No Deal Brexit may bring further uncertainty.
The report also shows that in the prime central London market prices were static year on year at an average of £1,878,004, fell by 2.2% month on month but increased 2.7% on a quarterly basis. But sales fell by 13.1% and are still lower than during the Global Financial Crisis.
New build average prices increased to £3,419,389, a premium over existing stock of 54.5%, down from 68.2% and sales fell considerably and are down 48% from two years ago.
‘With property listings thin, there is more competition for good quality stock. Nevertheless, exceptional value can still be found in the current market, especially for dollar denominated investors,’ said Heaton.