London's sales volume lowest since the 2009 crash

19/07/2022
78
3 min read
Our Housing Market Report takes the most recent available data from the Bank of England, Land Registry, Office for National Statistics and Propertymark.


London
England and Wales
Average House Price
Most recent Land Registry data April 2022
£528,829
Up 8% YOY (record high)
£294,521
Up 12% YOY (record high)
Average Sales Volume
Most recent Land Registry data Feb 2022
4,736
Down 49% YOY
46,935
Down 46% YOY

Headlines for July 2022
  • London and England/Wales hit record house prices in April 2022
  • Lowest sales volume in England/Wales for February since 2013
  • Average number of properties for sale per member branch in May 2022 was 22 (pre-pandemic average for May of 50 based on 2010–2019 figure).
  • 78 per cent of sales were agreed at or above the original asking price in May 2022
  • Mortgage approvals for home buyers down 23% YOY for May 2022 (England and Wales)
  • Average annual salary increases to £31,252

20220719 July 2022 Average House Price for London vs England and Wales for July 2022

London's sales volume lowest since the 2009 crash

The SDLT holiday drove up volume to record highs in June 2021, however since then the number of sales registered at the Land Registry fell to 4,736; the lowest for February since the financial crash in 2009. For England/Wales it was the lowest February since 2013.

Whilst it is clear that the housing market has shrunk, post pandemic and SDLT holiday, the average house price in London hit record highs of £528,829 and similarly in England/Wales, £294,521. With Propertymark's data, it is showing that whilst the activity is falling, house prices remain at record highs.

20220719 July-2022 Sales Volume for London vs England and Wales

Mortgage beats pre-pandemic

Bank of England data shows that mortgage lending to purchase property was up to 66,163 in May 2022 which is down by 23% YOY. Whilst lower than 2021, the mortgage approvals are up on the 65,587 of pre-pandemic May 2019.

Conveyancers will be left with another demand issue

After 2 years of huge demand for conveyancing transactions that caused huge delays of up to 20 weeks to get to completion and then Land Registry backlogs, the fall in sales volume is going to impact a number of conveyancing firms who rely on high volumes. The challenge for many firms who have stocked up on staff to cope with the high demand post-pandemic is how long do they leave it until they look to downsize?

Whilst for some the pipeline of cases is strong at the moment, however come Autumn when the completions will be through and the case loads lower, firms will be looking long and hard at the issue of a housing market that has shrunk by nearly 50%.

Summary
As we enter the summer months we see the sales volumes continuing to fall. However, the NAEA reports show demand and mortgage approvals for house purchases are strong.

The question still stands, how long can the housing market continue to grow whilst the average sale price is at record highs?

Sources: Bank of England, UK House Price Index, ONS and Property Mark (NAEA). See previous reports here - London Conveyancing Market.


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