The residential property may be ‘poised for a potential upturn’ despite transactions being over 40% down on 2019. A 6% increase in the number of new properties coming to market and listings remaining above 2019 levels since the turn of the year, point to a ‘possible return to more dynamic conditions’ according to the latest Landmark Residential Property Trends report
Supply is the strongest it has been ‘in years’ suggest the environmental search property data provider which, coupled with moderate growth in completion rates and the increasing availability of competitive mortgage deals could see an upturn when the economic outlook stabilises.
The report provides current numbers around listings, sold-subject-to-contract (SSTC), volume of searches ordered and completions against a benchmark of 2019; the last time the market saw some semblance of normality before the impact of the COVID-19 pandemic.
Sold Subject to Contract (SSTC) levels are down 32% compared to the same time in 2019 (Q2) and completion rates remain 41% below 2019 levels.
CEO of Landmark Information Group Simon Brown says external factors remain an issue for home movers
“Our data shows it is not a capacity issue, but anecdotes point to a mixture of consumer reticence to take on costly mortgages at current rates, mortgage availability and also we see inefficiencies in the homebuying process – with a 19 week average time from offer to completion, which is an increase of 64% since 2007.”
“Our Q2 trends data paints a clear picture of the scale of the challenge the new Government inherits. Whilst housing supply is the strongest it has been in years, inefficiencies within the home-moving process, combined with affordability constraints for buyers, mean that transaction levels are not where they should be. This is frustrating for home-movers and detrimental to the property market as a whole. By putting data at the heart of the home-buying and selling process, we can streamline transactions, reduce delays, and ultimately revitalise the property market.”
But he is buoyed by the new government’s commitment to the property market
“With the property market contributing to 20% of UK economic activity, addressing these inefficiencies presents an enormous untapped opportunity. The Labour Government’s commitment to building 1.5 million homes is commendable, but unless we also focus on improving the transaction process and ensuring economic stability, it could take years to see the full benefits.”
The sentiment largely mirrors the most recent Royal Institute of Chartered Surveyors (RICS) UK Residential Market Survey for June 2024 which identified double the number of respondents in June indicated they anticipate higher property transaction volumes in the coming months, as in May 2024; with the sentiment at its highest since January 2022
One Response
There is no point in having a greater supply if we do not have the buyers. This has been the problem since Liz Truss. The supply remains decent but we haven’t got the buyers. There is no point in speculating that there is going to be an uptown until the interest rates come down.
Buyer are waiting but I think they are being a bit naïve. There is quite a lot of stock there and not enough buyers. If buyers take on the interest rates at the moment, they can no doubt bargain sellers down £10k-£20k perhaps even more. Whereas at the moment buyers are waiting for a £50-£100 a month drop in mortgages. Granted some have to wait but some really do need to weigh up the options of a £600-£6k benefit in cut interest rates over the life of their fixed rate against a bigger save by negotiating in their strong position. When we do get the buyers back again, that negotiating position will be lost.
If I could get a £20k reduction on a property at the moment, I would take that even if I am paying £50/£100 a month more on an interest rate for a couple of years.