Without stating the obvious, the doom and gloom surrounding the property market must be taken in the context of one of the most turbulent periods of social and economic history.
The huge upsurge in transaction volumes throughout 2021 and 2022 by almost all accounts defied market logic. Most economic indicators of a market in decline were plain to see; rising prices, increasing interest rates, and social and economic uncertainty.
Despite this, the market continued to thrive. The latest UK House Price Index (published in January with data to the end of November 2022) shows a 10.3% increase in the price of a property over the course of 2022.
But there are signs that change is coming. A small reduction in house prices from October to November may be an indication of the start of a slowdown. Alongside this, RICS’ November 22 UK Residential Market Survey shows that buyer demand is on the wane with seven consecutive months of reduced sentiment and agreed sales down by a third.
Geodesys have tracked the average number of transactions per month from figures gathered over the last 17 years of available data from gov.uk, and have identified that the monthly averages are as follows:
In order to properly understand whether the current dip is related to market forces or the usual seasonal decline we see at the end of the year, you have to look at the trends. Average figures indicate that December transactions are normally 9.0% of the year’s totals.
However, despite it feeling like a quiet month, transaction volumes in December 2022 still remained a touch above the 102,000 transactions seen in December 2019 and December 2021. Incidentally the highest ever year-on-year drop in transactions was in 2008/09, when they dropped by 47% against the year before.
Currently, April 2022 to March 2023 looks as if it may only hit 990,000 residential transactions in England and Wales. This would be a 17.5% decrease on 2021/22 figures, which ended on 1.2m, and would be the second highest year-on-year fall in 17 years.
On a more positive note, search report sales in the first two weeks of January suggest that there is an uplift over December on the way. January normally only accounts for 6.6% of the year’s transactions and there are indications that 2023 could start on a high.
The danger of looking purely at the statistics though is that we neglect some of the more nuanced social machinations of the market. 2022 is the first year since the start of the pandemic we have had a genuine sense of freedom from the restrictions which have impacted all our lives, especially in the run up to family occasions like Christmas. Did people put off their home move until the new year in acknowledgment of this?
The traditional Rightmove Boxing Day to New Year’s Day surge might suggest so, with the website reporting its busiest ever festive period for home-mover activity. Site visits hit new records, while buyer demand was up 23% compared to the same period last year and the number of new sellers coming to market was up by 21% on Boxing Day compared to the same day in 2020.
And if the truth be told, isn’t a reduction in transaction volumes welcome relief from the mayhem of the last couple of years? With reports of conveyancers leaving the industry in their droves, without the numbers or expertise to replace them, alongside the impact on the mental health and wellbeing of practitioners, we might share a collective sigh of relief if transaction volumes return to the stability we saw throughout the 2010’s.
Jonny Davey is Business Development Manager at Geodesys
This article was submitted to be published by Geodesys as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.
