Falling residential property prices seen
Residential property sales have fallen significantly across England and Wales since 2007 amid a widening North/South housing divide, according to new research by Lloyds TSB.
The number of property sales in England and Wales has almost halved over the past three years, but there has been a clear North/South divide with property sales in the South down by 42% compared with a 51% drop in the North.
Overall, there were 649,957 home sales in England and Wales in 2010, some 47% less than 1,222,402 in 2007, the report which tracks home sales movements across England and Wales shows. It is based on Land Registry data and covers the 500 largest towns and London boroughs.
The southern regions of England recorded the lowest declines in property sales since 2007 with the smallest fall in the South West, down 39%. In contrast, the number of home sales in the North declined by 56%, more than in any other region. The North West was down 55% with Yorkshire and the Humber experiencing the next largest falls at 53%.
A modest recovery in sales in 2010 was led by London. There was a 6% rise in home sales in England and Wales between 2009 and 2010. Sales increased by 22% in Greater London, far exceeding the rises elsewhere with Wales recording the next biggest increase at 7%. East Anglia was the only region not to experience a rise in sales; they were static at 0%.
Seven out of the ten towns of boroughs that saw the biggest increases in property sales between 2009 and 2010 are located in the South. Brent in London recorded the largest increase at 53%, followed by Tadworth in Surrey at 51%.
Esher in Surrey recorded the smallest decline in sales, down just 14.6%. Indeed all four towns with the smallest decline in property sales between 2007 and 2010 are in the South East. Outside southern England, Kenilworth in the West Midlands recorded the smallest fall in sales at 24%.
Half of the ten towns with the largest declines in home sales since 2007 are in the North West. Birkenhead on Merseyside saw the largest decline at 69%, followed by Burnley and Gainsborough in Lincolnshire, both down 68%. No towns in the South feature amongst the ten towns with the biggest falls in sales.
House price growth has generally been stronger in the locations that experienced the lowest falls in home sales. Between 2007 and 2010, house prices rose by an average of 5% across the ten towns that saw the smallest drop in property sales.
‘The decline in housing market activity over the past three years has been substantial. The current level of activity remains significantly below historic levels despite most regions seeing some increase in transactions in 2010. A North South divide appears to have opened up in the housing market with both home sales and price growth in the south proving more resilient than the north over the last few years,’ said Suren Thiru, Lloyds TSB Housing Economist.
‘Looking forward, the overall level of activity in the housing market is likely to remain somewhat subdued for the foreseeable future, although regional differences are likely,’ Thiru added.