Lowest level of property sales for four years
Wednesday 11th April 2012
The number of property sales hotspots in England and Wales fell to their lowest level since the height of the financial crisis, according to research by Lloyds TSB.
Just 40% (202) of the 500 towns tracked in England and Wales were "property sales hotspots" - towns that recorded a rise in home sales - in 2011.
This was the lowest proportion of towns experiencing an annual rise in sales since 2008, when all towns recorded a fall in sales and less than half the proportion in 2010 (82%).
Overall, there were 630,389 home sales in England and Wales in 2011; 4% less than in 2010 (654,481).
Some 59% of the towns that saw a rise in home sales in 2011 are in the north against 41% in the south. This is a reversal of 2010 when southern towns accounted for the majority of the country's property sales hotspots (53%). Regionally, the north of England and East Anglia had the highest proportion of property sales hotspots with 61% of all towns surveyed in both regions seeing a rise in sales. These regions were closely followed by the West Midlands (60%). In contrast, London had the lowest proportion of sales hotspots in 2011 (16%) having seen sales decline by 6% over the past year.
Three of the five towns with the biggest increase in property sales between 2010 and 2011 are in the West Midlands: Bilston near Wolverhampton (30.7%), and Rugeley in Staffordshire (30.6%) filled the top two spots, whilst the market town of Wednesbury (19.4%) saw the fifth largest rise in sales. Bootle on Merseyside completed the top three (21%). The Norfolk town of Thetford (18.5%) recorded the biggest increase in southern England and was the only non-northern town in the top ten.
Eight of the ten towns with the largest declines in home sales in 2011 are in the south of England. Tower Hamlets recorded the largest fall (-22%), followed by Potters Bar (-20%) and Penzance in Cornwall (-19%).
Between 2010 and 2011, house prices rose by an average of 0.2% across the ten towns that saw the biggest drop in property sales. This is in contrast to the 4.5% fall in house prices among the ten towns that recorded the biggest rises in property sales.
House prices fell by 3.2% in Bilston - the town with the biggest increase in sales - and rose by 1.8% in the Tower Hamlets - the area with the biggest drop in home sales over the past year.
There were notable exceptions to this pattern with Bootle being the only town among the ten top home sales hotspots to record an increase in house prices (5.1%).
Over the past year, supply conditions have generally been tighter in southern England compared to the rest of the country. This is likely to have helped to support prices in the south relative to the north, but also constrained the level of sales in the area.
Suren Thiru, Lloyds TSB Housing Economist, said: "The overall level of housing market activity across England and Wales has weakened over the past year, reflecting the concerns over the outlook for the UK economy. Additionally, consumers are experiencing difficulties in raising the necessary deposit, which is preventing many potential home buyers from entering the market.
"Whilst a number of towns in the north have seen a significant rise in home sales, these increases have been from a historically low base. Generally, property prices in the north continue to be weaker than in the south."
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