Fall in sales of top-end homes

 

Sales of top-end homes continued on a downward spiral after the Government introduced a stamp duty hike on properties worth more than £2 million, Land Registry figures showed today.

The number of homes which sold for more than £2 million saw a 40% year-on-year fall in April to 114, following an equally dramatic 40% annual drop recorded in March during last month's study.

A 7% stamp duty rate was imposed on homes in this bracket from March 22, causing estate agents to warn that some sales further down the property chain would also crumble as a result.

Sales of homes worth £1 million to £1.5 million plummeted at an even faster rate, by 47% year-on-year, to 248 in April, the latest month for which the figures are available. Sales of properties worth between £1.5 and £2 million were down by 38% annually, to 106.

The vast majority of the top-end sales took place in London, which has had strong interest from overseas buyers and has been vital in keeping average house prices up.

By comparison, sales of homes within the average house price bracket of £150,001 to £200,000 were down by 25% year-on-year, with 7,685 completed purchases.

Elsewhere, the study showed that house prices rose by 0.1% month-on-month and by 0.9% annually in June in England and Wales to reach £161,777.

But analysts said this upswing was unlikely to last for long as house prices rose far more slowly in the second quarter of this year than in the first.

Ed Stansfield, chief property economist at Capital Economics, said: "Having risen by 0.7% in the first quarter of the year, average house prices rose by just 0.2% in the second quarter.

"The regions reporting the strongest gains in June all experienced similar or larger house price falls over the previous one or two months.

"In other words, the latest sharp rises may be little more than the normal month-by-month volatility in the data."

London saw the biggest year-on-year increase, with a 6.3% rise taking typical prices to £359,476, while Yorkshire and the Humber saw the biggest annual price fall with a dip of 1.9% as well as the biggest monthly fall with a 0.3% drop taking typical prices to £117,908.

Wales saw the biggest month-on-month increase, with a 2.5% rise taking average prices to £118,847.

Home sales generally have increased between January and April 2012, when compared with the previous year, although much of this has been due to the ending of a first-time buyer stamp duty concession in March, which lenders and estate agents said caused sales to bunch up.

There were 47,242 property transactions between January and April this year, compared with 43,686 in the same period a year ago.

Borrowers with smaller deposits are expected to have a particularly tough time finding a mortgage in the coming months as lenders continue to tighten their criteria in the weak economy, although there have been some recent signs of increased competition to attract those with larger amounts of equity.

Estate agents warned that the Chancellor risked "killing the goose that lays the golden egg" when he announced the 7% rate on £2 million properties in the Budget.

But George Osborne defended the move and said it is "fair when money is tight, and so many families could do with help, that those buying the most expensive homes contribute more".

PA

Discover more property articles at Homes and Property
Property search
Property search
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + uncapped commission, Benefits, OTE £100k: SThree: ...

Guru Careers: Dining Room Head Chef

£32K: Guru Careers: We are seeking a Dining Room Head Chef to work for one of ...

Guru Careers: Pastry Sous Chef / Experienced Pastry Chef

£27K: Guru Careers: We are seeking a Pastry Sous Chef / Experienced Pastry Che...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Are you a recent graduate loo...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine