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Sales of London homes under £250,000 drop 51% in 2015

Transactions volumes at value end of market falling fastest as supply dries up

Sales of affordable homes in London more than halved in the first eight months of 2015 compared to the same period last year, according to analysis from Cushman & Wakefield. 

The lowest value segment of the market – homes under £250,000 – has witnessed a 51% decline in sales, the steepest of any price point across London. Just 10,449 homes in this band were sold in the first eight months of this year compared to 21,337 in the same period in 2014 as the supply of homes coming to market below £250,000 dries up.

Total sales of London residential properties fell from 79,226 to 58,322 with volumes in the first eight months declining across the board. A range of factors have contributed to the decline including mortgage availability, the General Election and changes to Stamp Duty Land Tax which have made buying property over £1m more expensive.

However, the contrast in the rates of decline between price bands is stark. Sales of homes over £250,000 declined by an average of 17%, far less than the 51% drop-off below the quarter of a million mark.

Fig 1 London residential sales (source: Cushman & Wakefield/Land Registry)

London residential sales, January to August inclusive



£0 - £250k



£251 - £500k



£501k - £750k



£750k - £1m



£1m - £2m



£2m - £5m



£5m - £10m










Candice Matthews, a Director in Cushman & Wakefield’s London residential team, said: “While Stamp Duty’s impact on sales is undeniable, the rate of decline for homes below £250,000 is far more severe than above the much-talked about million pound threshold. Even sales of London’s most expensive homes, above £10m, where Stamp Duty costs are highest haven’t dropped off to the same extent.

“The biggest problem at the value end of the market in London is lack of supply and our analysis is a clear indictment of London’s increasing unaffordability. Rising prices have steadily eroded the number of homes coming to market for less than £250,000. Londoners with this budget are instead being locked into renting where they often face much higher monthly outgoings as a result.”

Since December 2014, stamp duty has been applied like income tax: 0% up to £125,000 of the purchase price, at 2% between £125,000 and £250,000, at 5% over £250,000 to £925,000, at 10% over £925,000 to £1.5m and at 12% for everything above.

David Ramsdale, Research Analyst at Cushman & Wakefield, added: “The Government is likely to look at revising the tax over the next 12 months, particularly once the Stamp Duty revenue figures for the financial year are released next summer.

“We believe the greatest focus needs to be on homes below £250,000. One thing that would help affordability in London would be to adjust the Starter Homes Initiative. This helps first-time buyers under 40 years old get on the property ladder by making homes available at 80% of the market value up to a limit of £450,000 in the capital. The transaction figures suggest this should be lowered to the national figure of £250,000 in order to have a significant impact.”