What price that first step on the property ladder?
There are still plenty of buyers keen to get on the housing ladder, but only at the right price. This situation has been exacerbated by the media calling the peak of the London market and buyers thinking they can use this to negotiate prices down as a result. Stamp duty has also had a major impact, adding to the overall price-tag and, in the case of properties above the £1.4million mark, quite punitively so. Many buyers are trying to offset this cost by negotiating asking prices down still further. The 3% surcharge on stamp duty rates due to be introduced from April 2016 will only exacerbate this trend.
By contrast, most sellers seem happy to wait for the market to change in their favour. However, there was still a jump in sales after the end of the summer slowdown (exchanges in the three months to end September were 9.4% higher than the previous quarter) as sellers came to market with more realistic asking prices.
Fall-throughs were up 4% on the previous quarter, but down by 22.9% across the first nine months of 2015 when compared to the corresponding period in 2014.
However, the market in prime central parts of London in the first nine months of last year was less active than in the corresponding period in 2014: sales were down by 12%, and people registering as would-be buyers were down by 21.5%.
Offers are taking longer to reach exchange – this is due to various reasons: such as longer mortgage application process time; changing mortgage lending criteria; and more detailed legal searches.
Several major overseas purchaser sources have eased back on their buying activity this year – notably Russians and Chinese buyers. Even Middle Eastern interest, while still healthy, was lower in 2015 than it was the previous year.