According to the data, this is 8.2% lower than June 2017 and a 6.9% drop from the previous quarter. Annual transactions fall 8.5% to levels last seen during the Global Financial Crisis (GFC).
These falls have been seen across PCL, with new build transactions falling 17.3% across the year. New build prices, however, reach a record high of £3,209,089, an almost 90% premium over existing stock.
Naomi Heaton, CEO of LCP, comments: "Prices in Prime Central London (PCL) in June now stand at £1,754,317, a fall of 8.2% compared with this time last year. They are currently no higher than they were almost four years ago, in a market that has enjoyed annual average growth of 9.9% since 1996.
In December 2014, Graduated Stamp Duty was introduced increasing the top rate for more expensive properties from 5% to 12%. Since then there have been two general elections, a referendum and six further tax changes to the residential sector. This combination has lead to a significant readjustment in prices.
It has also lead to transactions falling to the same level as seen in the Global Financial Crisis (GFC) and which now stand at 3,760. This is as few as 72 a week and has significant ramifications.
Countrywide (the UK’s largest estate agent) issued a profit warning in June for their first-half earnings, leading to an almost 30% fall in share price. Listed house builders are also seeing falling share prices amongst concerns of a chaotic Brexit and an increase in property down-valuations.
Whilst there was an increase in the proportion of higher value transactions in the first part of 2018, this surge appears to have dissipated. This has been reflected in the average price falling by 11.1% from a high of £1,973,140 in February."
Greater London annual prices rise by just 0.5%
LCP revealed that average prices in Greater London during June are now standing at £628,807 - annual prices have only seen an increase of 0.6%.
According to the figures, annual transactions fell by a further 8.0% and remain just above the level seen during the GFC. These falls have been seen across Greater London with new build transactions falling 12.6% over the year. New build prices reach a record high of £755,553, representing a 26.4% premium over existing stock
Naomi Heaton, concluded: "Whilst there has been a rally in average prices in Greater London over the last quarter, with a record high of £628,807 achieved in June, annual prices have seen growth of just 0.5%.
While these statistics do not reflect the discount from original asking price to sale price, a disconnect between seller and buyer expectations can be observed. This is undoubtedly a contributing factor to the sluggish level of transactions. Current annual sales have fallen 8% and now stand at 87,080, just above the levels last seen during the GFC.
With current residential tax policies and the lack of a defined plan for a post-Brexit UK contributing to economic uncertainty, it appears that only those who have to move are doing so. Falling prices will only exacerbate this as sellers are not motivated to move if they see the value of their home decline.
Soft prices and a general trend towards down-valuing properties could also have a concerning impact on the government’s Help to Buy Scheme, which has enabled buyers to take a 95% loan. Existing owners may now find they are in negative equity when it comes to re-mortgaging their homes, with serious repercussions."
