Property listing volumes are currently averaging 6% higher than in Q2 2019, which is being used as the benchmark year. This suggests that supply is the strongest it has been in years. However, transactions are struggling to progress through to completions, reflecting the ongoing affordability issues driven by high interest rates, new figures show.
Market Struggles with Completions
Landmark’s newly released Q2 Residential Property Trends report provides a comprehensive analysis of property data from the second quarter of the year, examining the entire residential property transaction chain. The data reveals that Sold Subject to Contract (SSTC) levels are down 32% compared to Q2 2019. Similarly, completion rates, while showing moderate growth in May, remain around 40% below where we’d expect from normal market conditions.
Despite these challenges, the data suggests that the market is poised for a potential upturn when the broader economic picture stabilises. The high level of listings, coupled with moderate growth in completion rates and the increasing availability of competitive mortgage deals, points to a possible return to more dynamic conditions in the latter half of 2024. This potential upturn is contingent on economic stability and systemic inefficiencies being addressed by the new government.
Calls for Improved Transaction Processes
Simon Brown, CEO of Landmark Information Group, emphasised the scale of the challenge facing the new government: “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.”
Brown continued, “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.”
Potential for Market Revitalisation
Despite current struggles, the report suggests that there is potential for market revitalisation. The combination of high listings and the prospect of more stable economic conditions could see a rebound in the market. However, for this to be realised, the government must focus on both increasing housing supply and enhancing the efficiency of the transaction process. This dual approach is essential to ensure that the benefits of increased housing stock are fully realised and that the property market can contribute more robustly to the UK’s economic activity.
While the current property market faces significant challenges, there is hope for improvement. A focus on systemic inefficiencies and economic stability could pave the way for a more dynamic property market in the near future.
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