London still in trouble as transactions tumble once again

Transaction volumes in prime London fell in July according to data from LonRes.

Transactions were down 22 per cent compared with July 2020 and were 39 per cent lower than the five-year July average running from 2015 to 2019 inclusive.

The number of properties going under offer fell compared with July 2020, down 16 per cent - although July 8 last marked the start of the stamp duty holiday and as a result under offer volumes were higher than usual in 2020.

Comparing under offers with the five-year July average shows under offers were down just 1.0 per cent.

“It’s been a quiet July for exchanges as sales which under normal conditions would have occurred this month were pushed forward into June [because of the stamp duty holiday]” says Marcus Dixon, head of research at LonRes.

“Unsurprisingly, the lower end of the market saw the biggest fall in activity between June and July.  

“Only the top end of the market, above £5m, recorded an annual increase.  Buyers here were perhaps less inclined to be part of the conveyancing scrum leading up to June 30.”

He continues: “While July this year looked particularly quiet compared to the same time last, the reality is that new instructions and properties going under offer over the course of the month were much more in line with the long-run average.  And if confidence were needed, these key metrics suggest the prime London markets are holding up well.”

The consultancy says the tapering stamp duty has made analysis of sales activity and prices more difficult, but it believes new instructions and under offers appear to be returning to long-run levels.

The number of properties put under offer was down just one per cent on the 2015 to 2019 July average and eight per cent down on 2020 when activity was recovering as the market re-opened and the stamp duty holiday was announced. 

New instructions were also up - by six per cent on the five-year average and by five per cent on July 2019.  However, new instructions did fall short of 2020 levels, when stamp duty incentives and lack of activity over the first lockdown brought more homes to market.  

As a result, new instructions were down 23 per cent this July compared to July last.