Sitting tight: London property sales plummet by more than 40 per cent in four years

Bad news for estate agents and removal companies – the number of people moving house in London has collapsed over the past year.

Sales are down more than six per cent across the capital as a whole and 10 per cent in expensive central London.

And transactions are down more than 40 per cent since 2014, according to investment consultants London Central Portfolio.

It described the market as “stubbornly depressed”, due to Brexit jitters and also changes to stamp duty, which the Government intends to increase again to target wealthy foreign buyers.

London Central Portfolio calculates that between April and June, tax receipts for stamp duty in England and Wales fell £317 million compared to the same period last year, although this is also in part due to the stamp duty holiday being offered to first-time buyers on homes worth £300,000 or less.

The research found that new homes have been particularly hard hit by the downward spiral, with annual transactions down by 12.6 per cent.

“Without a thriving new-build sector it seems difficult to see how the Government is going to meet its targets for affordable housing,” says Naomi Heaton, chief executive of London Central Portfolio.

Housebuilder Berkeley Homes’s latest trading update complains that the market in the capital currently “lacks urgency”, blaming not only high moving costs and political uncertainties but “restrictive” mortgage borrowing.

Berkeley anticipates that its profits next year will be around a third lower than last year.

Lucian Cook, head of residential research at Savills, agrees that as well as Brexit and stamp duty, mortgage restrictions are also curtailing sales.

“People have hit the limits of mortgage borrowing, particularly as interest rates have started to move north,” he says.

What this means, adds Cook, is that most people now only move if they really have to – cases of divorce, probate sales and those relocating for a new job being the obvious examples.

In the long term, he predicts, the stagnant market will be a “drag on house price growth”.

Slow and sticky

Around London the latest UK Market Residential Survey, carried out by the Royal Institution of Chartered Surveyors, found agents concerned about the slow and sticky market.

“We are seeing a relatively good number of viewings but not much commitment,” says Jeremy Leaf, of Jeremy Leaf & Co in Finchley. “Less demand from investors, too, means less pressure on buyers and transactions are taking longer.”

However, Robert Green of John D Wood & Co in Chelsea, points out that the summer is traditionally a slow period for buying and selling. “Websites enjoyed good traffic, indicating demand is there,” he says. “We look forward to a busier autumn.”