London’s flats have decreased in sales as the prices are out of reach for ordinary first-time buyers, according to new research.
According to figures from Home.co.uk, which analyses data from the Office for National Statistics and property portals, which the number of apartments sold in the capital fell by 47pc in July compared to 12 months previously.
The number of detached properties sold in London fell 5pc in 12 months to July this year, with sales of terraced houses down 8pc. This comes amid a general slowdown in the level of transactions across the country, and particularly in London.
According to the Land Registry, the average price of a flat in London increased by 3.9pc in the 12 months to July to £434,587. The price growth of flats is outstripping all other property types across the country, partly due to a lack of supply, being led by the rises in the capital.
With the slowdown in sales signals that affordability has been crunched and many first-time buyers, who would typically purchase these properties, are sitting on their hands and waiting for a correction in prices.
While the Government’s Help to buy scheme has allowed many first-time buyers across the country to get on the property ladder with a 5pc deposit, the take-up in London has been far lower. The threshold of £600,000 means that many newbuild properties are too expensive to qualify and analysis by the BBC earlier in the year found that while Help to Buy is used to buy one in three new-build homes outside London, in the capital it is just one in 10.
Other natural buyers of these properties, buy-to-let landlords, have also been squeezed by changes to the tax regime and many are sitting out buying opportunities or selling up their portfolios.
Lucy Pendleton, the founder of estate agency James Pendleton, said: “Solid numbers of people are showing some reluctance at current prices and signaling to all the other market participants they can’t transact unless they come back down to earth.”
A correction could soon be coming: data from Acadata and LSL property services found that prices in London have fallen the most since the financial crisis. Average property values have fallen 2.7pc in the year to September, the most since 2009.