Estate agency James Pendleton says the sales of flats across London have collapsed 47 per cent in only a year – and it claims that at least part of the reason is over-valuation.
The firm – which last month slated parts of the estate agency industry for being “dodgy” and “unscrupulous” – says that with flats being a mainstay of the first-time buyer market , such a drastic reduction in transactions can have widespread consequences.
It says that firures from website Home show the number of flats sold in London in July 2016 was 4,709 but by July 2017 this had dropped to 2,494. Sales of other property types also fell during the same period, but with less severity.
For example, the number of detached properties sold fell 5.0 per cent, semi-detached sales were down 1.0 per cent and sales of terraced houses down 8.0 per cent.
During the same period under analysis, the average prices of apartments that did sell were 2.0 per cent higher over the year.
Lucy Pendleton, founder of James Pendleton agency, says the sales collapse for apartments in the capital is a classic sign that first-time buyer demand is sensitive.
“There is a temptation to wait on the sidelines while prices become more realistic. When that happens it can only be a good thing, because housing markets are most stable when transactions are healthy across the board. A reality check is in the offing after such strong growth in London and the scale of this drop in sales of flats tells me it is now more likely to be inevitable” she says.