Not trading places: London home sales fall to half of pre-recession levels leaving homeowners struggling to climb ladder

The number of homes changing hands in London is running at around half the levels seen before the recession.

According to new figures from the The Office of National Statistics (ONS) during 2017 just over 52,000 houses and flats were sold across the capital. In 2007, before the recession, more than 92,000 homes were sold.

Two years ago the number of home sales in the capital appeared to be reviving, partly due to an influx of overseas buyers, with more than 62,000 homes sold.

But the evaporation of international interest and investors in central London, tougher mortgage lending rules, high deposits, increases in stamp duty, and — of course — Brexit, means those gains have now been lost.

The figures are backed by UK Finance, formerly the Council of Mortgage Lenders. It found that in 2007 more than 70,000 mortgages were granted in the capital. Last year this number had fallen to around 35,000.

Lucian Cook, director of residential research at Savills, agreed with the findings and said “It is more of a buyers’ market, which is a complete turnaround on two years ago. First time buyer numbers are not too bad, but people are finding it hard to trade up.”

According to the ONS the worst affected include expensive boroughs in Zones 1 and 2.

Last year only 1,700 homes sold in Camden but in 2007, the borough saw 3,503 homes sold. In the City of London just 150 homes were sold last year. And in Wandsworth, where thousands of new flats at Nine Elms have come onto the market, a comparatively modest 3,422 properties were sold. At the peak of the market in 2007 6,666 homes exchanged homes.

Winners include affordable Newham, where 2,160 homes were sold last year up from 1,814 back in 2007. However this increase has to be seen in the context of massive housebuilding in the Olympic borough, dramatically increasing its profile and supply.

In the outer suburbs the market was also slow. Fewer than 1,000 homes were sold during the year in six suburban boroughs: Barking and Dagenham, Bexley, Harrow, Havering, Kingston upon Thames and Redbridge.

The good news for those in a position to buy a home in 2018 is that they will be in a strong position to bargain hard in a market which Cook believes will remain very “price sensitive” this year.

Savills forecasts that London’s prices will fall two per cent this year, followed by a gentle period of recovery.