Sales slump in the South after Brexit deadlock
The South was to blame for the UK property market’s sales ‘slump’ following the aborted March Brexit deadline, according to property developer Southern Grove.
It was mainly in the South, where stretched valuations made the region more vulnerable to the risks associated with the political deadlock, that there was a widespread decline in sales.
By analysing HMRC figures Southern Grove found that out of 406 local authority areas, 168 (41.4%) saw transactions fall between May 2018 and May 2019 and 104 of these places (62%) were in the South.
Andrew Southern, chairman of developer Southern Grove, said: “This is an eye-opening dissection of a collapse in sales that was clearly weighted towards the South. It’s a region that has seen huge price growth over the past five years so it’s no accident.
“Homeowners in more expensive areas clearly felt it was better to ride out the storm, as any subsequent purchase would carry a hefty stamp duty bill at a time when they couldn’t be confident property values would be bulletproof in the medium term.
“In that situation, it is only human to wait and see what happens.
“High valuations give homeowners a taste for the piggy bank they think their home has become and they are often wary of doing anything that could jeopardise that peak valuation.”
There was a 16.5% fall in year-on-year sales in June and a 12.4% drop in July before largely recovering in August.
Southern Grove believes unrealistic vendors and costly stamp duty exacerbated the slowdown.
Southern added: “It’s in this type of market that the hammer blow of stamp duty is most unhelpful. It’s a tax so punitive as to be totally counter-productive.”