10th February 2014
UK property sales reached a 10-year high in 2013 as improving consumer confidence and the Government’s Help to Buy scheme boosted activity writes Philip Scott.
Research from Lloyds Bank found that home sales in the six months to September 2013 rose to their highest level since the start of housing downturn in 2007.
The numbers of sales in England and Wales over the term were 21% higher than in the same six months in 2012, at 396,756 – representing the highest year-on-year increase in a decade for the six months to September period.
However, despite the renaissance in the sector, property sales were still 41% below the market peak of 673,699.
Regionally, there was remarkable consistency in property sales growth with a 23% rise in activity in both the North West and East Midlands between March and September 2012 and the same period in 2013. The lowest rise was 19% in the North East. The South East saw sales exceed 100,000 during the six months from March to September for the first time since 2007.
The number of towns in the survey recording a rise in sales in the six months to September 2013 increased to 98% of those surveyed, this compares with 26% in the same period a year earlier. Some 57% of the towns that saw a rise in home sales were in the south against 43% in the north.
In four regions – North, West Midlands, Wales and London – 100% of towns in the survey recorded an increase in home sales; whilst 93% recorded a rise in Yorkshire and the Humber.
Newham saw the largest increase in home sales with a 62% rise over the period. The East London borough is followed by Redhill in Surrey where transactions increased by 56%, followed by Farnborough in Hampshire, up 52%, Salford in Greater Manchester, 51% higher and and Walton on Thames in Elmbridge, up 50%.
However Crowborough in East Sussex saw the largest decline in over the same period with transactions down by 10%, followed by Caterham in Surrey and Hyde in Greater Manchester, where both recording a decline of 9%.
Notably house prices in the 10 towns that saw the biggest increases in property sales stand at an average of 6.3 times local gross annual earnings. This is lower than the average multiple of 6.9 among the nine towns that recorded falls in property sales over the same period. There are, however, notable exceptions to this trend. For example, the average house price to average earnings multiple in the Hertfordshire town of Ware – where homes sales grew by almost a half is 7.3 – almost twice the ratio in Dewsbury, at 3.7, where transactions fell by 7%.
Marc Page, mortgages director at Lloyds Bank says: “Since spring 2013 housing activity in England and Wales has been on the rise, with home sales in the six months to September up by over a fifth compared to the same period a year earlier. This increase is the strongest on this basis in over a decade. In addition, the number of towns in the survey recording an increase in transactions has grown over three times compared to the same period in 2012.
“Low interest rates, improvements in consumer confidence and Government schemes, such as Help to Buy, all appear to have contributed to the rise in home sales.”