House sales in London have dropped by more than 40 per cent in the last five years, according to the Royal Institution of Chartered Surveyors (Rics).
The number of house sales completed per surveyor in the capital during May was 11, down 45 per cent from the average of 20 sold in London in the same month in 2007, the group’s UK Housing Market survey showed.
Homes are now taking considerably longer to sell, with surveyors selling 40 per cent of the homes on their books in the three months to May, compared to 57 per cent during the same period in 2007. The market had reached an unsustainable peak at that point, while affordable mortgage finance is now hard to come by, Rics said.
Chartered surveyors expect to see transactions in the capital fall slightly in the next three months, while they are also sceptical about future price rises.
But for now prices have remained stable in London, with 30 per cent of respondents reporting increases. The reading is consistent with previous months and has remained in positive figures since January last year.
Chartered surveyors in London delivered a mixed view on the property market.
Charles Puxley from Chelsea-based Jackson-Stops & Staff said there had been a “definite lull” in central London. Prices were being dropped on much of the overpriced stock as “buyers are too sophisticated to overpay”, he said.
James Wilson from WA Ellis in Kensington and Chelsea said chancellor George Osborne’s Budget had caused confusion, particularly at the top end of the market.
“Stamp duty on company purchases has had an effect at the top end of the market and there is still a lack of clarity on this issue, in particular the chancellor’s implied ‘mansion tax’ and capital gains tax measures in next year’s budget,” said Wilson.
“The eurozone crisis is certainly making buyers more cautious but deals below £2m are still plentiful.”
London outperformed the rest of the country and was the only region to record more surveyors reporting a rise rather than fall in prices.
RICS housing spokesman Peter Bolton King said: “It’s no surprise to see such a sizeable drop in transactions since the market peak back in 2007.
“Ongoing economic instability in the UK and overseas has continued to undermine consumer confidence, and the reluctance of many banks to offer affordable mortgage products has created something of a stagnant market.”