Discount deadline causes stressful time for estate agents
Converted offices Rylett Studios sold for £2.2million. Picture: Finlay Brewer
The latest figures from the Land Registry show that the expiry of the Stamp Duty discount has led to a surge of transactions in larger family properties in Shepherd’s Bush.
The reduction in tax payable expired at the end of June after being extended by the government and new data is showing what impact this had on the local market.
One Shepherd’s Bush based estate agent said, “This June was the most stressful of my career and I never want a repeat even though we did a tremendous amount of business. In the end we completed every transaction in time to avoid paying extra Stamp Duty but that was not without a lot of frantic phone calls and quite a bit of bad language. As many deals were for larger homes there was an incentive to grin and bear it."
There have only been 39 sales in the W12 postcode area recorded so far by the Land Registry in the second quarter of the year but agents say this number will be revised up substantially as processing is taking eight to nine months in some cases.
The average sale price in the Shepherd’s Bush area was down by 31.6% to in the three months from April to June compared to the same period in 2020 but local property experts recommend disregarding this figure as the market was distorted by the impact of lockdown and a large number of units in the Television Centre development being sold during the comparable period last year.
The top price paid in W12 recently was £2.2million for Rylett Studios a former office building converted into a four double bedroom house. Larger houses make up over a fifth of the sales in the most recent quarter despite being proportional a much smaller part of the local housing stock.
Turnover for local flats and maisonettes remains slow with the Stamp Duty holiday providing less incentive for lower priced homes.
Shepherd's Bush Property Prices - (April - June 2021)
|Sales||Overall Ave||Total Sales|
|Change over quarter||-||-||-5.1%||-53.3%||17.1%||-57.7%||1.8%||-56.2%|
|Change over year||-||-||-1.1%||7.7%||-50.3%||-12.0%||-31.6%||-2.5%|
|Change over three years||-||-||-4.1%||-39.1%||-28.9%||-80.0%||-7.5%||-71.1%|
|Change over five years||-||-||31.0%||-6.7%||2.5%||-50.0%||17.9%||-37.1%|
|Change over ten years||-||-||37.6%||-50.0%||101.5%||-56.0%||62.9%||-53.6%|
Source: Land Registry
The estate agent added, “What happens next is the big question. Obviously transaction levels are right down now particularly for the larger properties as most people who were planning to sell this year had an incentive to do it in the first half. The hope would be that the market for flats would revive but it remains a bit dormant at the moment. The new build market could provide a boost but a lot of the ‘easy sell’ flats have already gone and the remaining stock will take longer to clear.
“For anyone looking to sell I would perhaps consider first the heat efficiency of your property and how to improve it because this is going to be an even bigger factor than before in making a home saleable.”
The average price of a property in the UK was £265,668 at the end of June according to the Land Registry a rise of 13.2% over the year and 4.5% over the month. London’s rise was well below this level with prices in the capital up by just 6.3% over the year. The North West by comparison saw a rise of 18.6%
Between May and June 2021, UK transactions increased by 74.1% on a seasonally adjusted basis as volumes recovered from lows seen during the lockdown.
The Nationwide’s House Price Index suggests that the market paused for breath in July with prices falling by 0.5% compared with the previous month.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “Annual house price growth slowed to 10.5% in July, from the 17-year high of 13.4% recorded the previous month. In month-on-month terms, house prices fell by 0.5%, after taking account of seasonal effects, following a 0.7% rise in June.
“The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6% a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.
“The tapering of stamp duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June (it will revert to £125,000 at the end of September). This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties. For those purchasing a property above £250,000, the maximum stamp duty saving reduced from £15,000 to £2,500 after the end of June.
“The stamp duty changes drove the number of housing market transactions to a record high of almost 200,000 in June as home buyers rushed to beat the deadline. This was around twice the number of transactions recorded in a typical month before the pandemic and 8% above the previous peak seen in March.
“For example, the number of transactions involving properties bought for £500,000 or higher increased by 37% over the 12 months to March 2021, compared to a rise of 2% for all properties. As a result, between Q1 2020 and Q1 2021 the share of transactions involving a property valued at £500,000 or above has increased from 12% to 18%.
“There has also been a shift in the composition of property types that have been transacting. Over the past six months the proportion of sales involving detached and semi-detached properties has increased, while the proportion involving flats has declined significantly.”
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September 27, 2021