Stamp Duty Sales Splurge Fulham's 'Last Hurrah'

Agents concerned for future direction of market after busy three months

House on Quarrendon Street went for £3,787,500
House on Quarrendon Street went for £3,787,500. Picture: Right Move

Estate agents in Fulham appear to be striking a cautious tone despite recently having an exceptionally active period for sales.

The expiry of the discount on Stamp Duty prompted many people to put their homes on the market to take advantage of the tax saving and sales were rushed through to meet the deadline at the end of June.

So far the Land Registry has only reported online 136 sales for the second quarter of 2021 but it is believed that this number is set to rise substantially as there is a significant backlog in processing.

The average price of sales from April to June of this year was £1,110,452 which is up on the first quarter but down by 12.9% compared to the same period in 2020.

One local estate agent said, “Ignore the fall over the last year. There was very low volume because of lockdown and on of the homes sold was for over £8,000,000 so the average is distorted. Prices are rock solid and I don’t think many vendors needed to pass on the Stamp Duty saving to the buyer as asking prices were generally reached in the second quarter.

“Volumes have been pretty good over the last year and the three months in the run up to the Stamp Duty holiday end may have been the best of all. The £1-2million price bracket was by far a way the most active as that is were the potential benefits of the tax benefit were optimal.

“However, there are now some indications that this is a last hurrah. Things have been much quieter since the end of June and an increasing number of my City based clients are talking about inflationary pressures and the possibility of an upward move in interest rates in the next year which would definitely hit prices. Ironically, any indication that we have finally seen the back of Covid-19 and lockdowns could be what triggers a fall in local property prices.

“The rental market has been slower to recover and landlords are willing to discount for premium tenants after problems during the pandemic. This suggest the yield support for prices is not what it was.”

Mid-sized properties were over-represented in the sales reported so far for the second quarter in Fulham with flat sales relatively weak.

The most expensive home sold during the three months was a six bedroom terrace property in Quarrendon Street which went for £3,787,500. The three million pound mark was also surpassed for houses in Rumbold Road and Bradbourne Street.

Fulham Property Prices (April - June 2021)
Area Semi-det Sales Terraced Sales Flat/
Sales Overall ave Total sales
SW6 1 0 0 1120000 2 607364 11 686231 13
SW6 2 0 0 1363250 6 569356 19 759891 25
SW6 3 0 0 2197143 7 729553 10 1333855 17
SW6 4 0 0 2124292 12 754333 9 1537167 21
SW6 5 0 0 1538111 9 690000 1 1453300 10
SW6 6 0 0 1627500 17 601000 12 1202741 29
SW6 7 0 0 1289822 9 593854 12 892126 21
Total 0 0 1684031 62 629886 74 1110452 136
Change over quarter -100.0% -100.0% -3.6% -27.9% -5.4% -51.6% 2.0% -45.4%
Change over year -100.0% -100.0% -10.1% 106.7% -32.7% -5.1% -12.9% 20.4%
Change over three years -100.0% -100.0% 8.2% 24.0% -21.9% -34.5% 4.9% -18.6%
Change over five years - - -4.7% 31.9% -27.0% -59.1% 3.7% -41.1%
Change over ten years -100.0% -100.0% 39.4% -43.6% 23.3% -60.6% 40.7% -55.1%

Source: Land Registry

The average price of a property in the UK was £265,668 at the end of June according to the Land Registry a rise of 13.2% over the year and 4.5% over the month. London’s rise was well below this level with prices in the capital up by just 6.3% over the year. The North West by comparison saw a rise of 18.6%

Between May and June 2021, UK transactions increased by 74.1% on a seasonally adjusted basis as volumes recovered from lows seen during the lockdown.

The Nationwide’s House Price Index suggests that the market paused for breath in July with prices falling by 0.5% compared with the previous month.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “Annual house price growth slowed to 10.5% in July, from the 17-year high of 13.4% recorded the previous month. In month-on-month terms, house prices fell by 0.5%, after taking account of seasonal effects, following a 0.7% rise in June.

“The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6% a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.

“The tapering of stamp duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June (it will revert to £125,000 at the end of September). This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties. For those purchasing a property above £250,000, the maximum stamp duty saving reduced from £15,000 to £2,500 after the end of June.

“The stamp duty changes drove the number of housing market transactions to a record high of almost 200,000 in June as home buyers rushed to beat the deadline. This was around twice the number of transactions recorded in a typical month before the pandemic and 8% above the previous peak seen in March.

“For example, the number of transactions involving properties bought for £500,000 or higher increased by 37% over the 12 months to March 2021, compared to a rise of 2% for all properties. As a result, between Q1 2020 and Q1 2021 the share of transactions involving a property valued at £500,000 or above has increased from 12% to 18%.

“There has also been a shift in the composition of property types that have been transacting. Over the past six months the proportion of sales involving detached and semi-detached properties has increased, while the proportion involving flats has declined significantly.”

Updates on the local property market are regularly published in the Fulham newsletter.

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October 5, 2021