3.25% drop in Surrey Property Transactions

In this post credit crunch world of interest and annuity rates so low a limbo dancer would smart, the growth of buy to let since 2009 has been phenomenal. So much so, there has been an evolution in the purchase of property in the UK from that of just buying the roof over one’s head to that of a buy to let investment where it is seen as a standalone financial asset to fund current and future (ie pensions) investment. So recently, a few days before the release of latest Land Registry data of property transactions, quite a few market commenters were anticipating a huge increase in the number of properties sold in January as the 1st of April 2016 stamp duty deadline got closer. However, looking at January's set of data released by The Land Registry, it seems there has been a drop in the number of completed property sales in the Surrey County Council area. Year on year, completed property sales in January fell by 3.25% to 1,311 compared with 1,355 in January 2015. Nationally, the number is similar, as the number of completed house sales fell by 5% in January 2016 compared with January 2015. Some might say this counters the reports that there was a rush by landlords to buy ‘buy to let’ property ahead of the 1st April 2016 deadline. So what happened to the stampede to buy that so many predicted? Looking at Staines specifically: in the TW18 postcode in January 2016, 37 properties changed hands, whilst 49 properties did so in January 2015. It’s even more interesting when you look at the average price paid: in January 2016, it was £397,175 yet in January 2015, the average price paid was £341,437.  Is the buy to let dream over for Staines landlords?  .. but as ever, the devil is in the detail. The 3% stamp duty surcharge for buy to let landlords was announced in the Autumn Statement on the 25th November 2015. Anyone who has bought a property knows from their offer being accepted to receiving the keys and monies paid is a long drawn out affair, taking on average 8 to 12 weeks. In addition the Land Registry only gets notified upon completion of the sale, so their data always lags behind reality. We also need to factor in that sales progression stands still for the last two weeks of December whilst we all enjoy Christmas. So if there was a rush in the last few days of November/early December in the Staines property market, we would possibly see the results in the February figures, but more probably in March’s (released in July). So why all the doom and gloom? Simple .. bad news sells newspapers and gets the headlines. Let’s be honest, the headline to this article is designed to be eye catching. However, when we look at both the bigger and smaller picture; nationally, property values dropped (month on month) by 0.5%; in the South East region they dropped 0.4%, whilst in Surrey they rose by 0.8%. The year on year figures tell a completely different story to that. Written July 2016