Property transactions and completions are “faltering” amidst ongoing affordability concerns with completions down 39% on this time in 2019, Landmark Information Group’s latest report has revealed.
Landmark’s Q2 Residential Property Trends report encompasses the entire transaction chain to produce “the most extensive cross-market examination of the property sector in England and Wales”.
The data shows that despite the tentative signs of recovery at the end of Q1, the continued fluctuation in interest rates, and subsequent squeeze on mortgage availability and affordability, disrupted transactions into the second quarter of 2023.
While supply continued to grow, with listings 12% higher in June 2023 than the 2019 benchmark, transactions are failing to progress to the Sold Subject to Contract phase, with the SSTC level 23% lower than in June 2019. This paints a somewhat different picture to data released by TwentyCi, who said sales agreed spiked in Q2 amidst a “remarkably resilient” market.
Landmark say the low level of SSTC volumes and affordability they have registered can be seen further down the transaction pipeline, with completions at their lowest level all year as consumers struggled to progress planned home-moves amid continued cost of living pressures. Completions in Q2 dropped 13% below Q1 of 2023, and were 39% lower than Q2 2019, on average, according to the study.
Additionally, mortgage valuation volumes were 35% lower in Q2 2023 compared to the same period in 2019, emphasising the challenges faced by prospective buyers.
“Despite the promising signs of market stabilisation we were seeing at the end of the first quarter, our data clearly shows how the broader economic instability was impacting the transaction pipeline into Q2 of this year,” said Simon Brown, CEO of Landmark Information Group, adding:
“Progressed demand has remained weak, likely due to ongoing high interest rates and subsequent restricted mortgage availability and affordability – and this has had an inevitable knock-on effect across the rest of the transaction milestones.
Activity will only flow through the pipeline once the market finds a balance between interest rates, inflation and the cost of housing. When that time comes, speeding up property transactions will be essential to a swift and sustained recovery.”
Today’s Conveyancer Podcast host David Opie was joined by Ben Robinson (Managing Director, Landmark Estate Agency Services) and Rob Gurney (Managing Director, Ochresoft) to discuss the findings. Listen below:
Key findings from the report
Landmark has provided the below summary of key findings from the report, the full version of which can be read here.
Cross market activity
- Listings volumes in Q2 2023 are healthy overall with activity up 1% Vs Q2 2019. By June, levels of available stock were 12% up on the same period in 2019.
- Demand was 35% lower in April 2023 Vs April 2019 and 23% lower in June 2023 Vs the same month in 2019.
- SSTC volumes in Q2 are on par with Q1 2023, remaining at approximately 30% under volumes we saw in Q2 2019.
- Volume of searches ordered in Q2 followed a similar patter to Q1 2023. Overall, volumes are 32% down on Q2 2019.
- Completions slowed in Q2 – down 13% on Q1 2023 volumes and 39% lower than Q1 2019.
Listings data
- Supply levels in April and May were down Vs 2019 by 8% and 2% respectively. However, they recovered steadily through the quarter.
- The recent spike in supply (June) could be attributed to a combination of fall-throughs, landlords off-loading their properties, and increased interest rates forcing homeowners to sell.
SSTC
- SSTC volumes seems to have plateaued in Q2 with fluctuations based on the variations in working days in April and May.
- The upward trajectory for SSTC levels seen in Q1 was not maintained into Q2. In April, volumes were 35% down on the same period in April 2019.
- By the end of the quarter, SSTC volumes had recovered slightly to reach -23% in June 2023 Vs June 2019.
- The increased number of working days in June may go some way to account for the recovery of SSTC transactions during this month.
Property Search to SSTC
- Residential SSTC and search volumes dropped in April and May, with a slight recovery in June.
- Residential search volumes for April 2023 were 37% lower Vs April 2019 and 32% lower in May Vs May 2019.
- June saw a slight bounce back in activity, with STTC levels increasing by 10% from May 2023 and residential search volumes improving by 6%.
Mortgage valuations to approvals
- June 2023 saw valuation levels just 9% down when compared to the same period in 2019.
- However, the impact of the 0.5% base rate hasn’t impacted the result of this quarter as the lag in processing kept valuation volumes stronger in June.
