Property transaction levels falter as cost of living bites

Affordability concerns are causing multiple property transactions to falter and completions to fail, Landmark Information Group’s Residential Property Trends report reveals.

Its report on the second quarter of the year shows that despite the tentative signs of recovery at the end of March, the continued fluctuation in interest rates and mortgage squeeze disrupted transactions.

TRANSACTIONS FAILING

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 (SSTC) phase, with the SSTC level 23% lower than in June 2019.

And the low level of SSTC volumes and affordability 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 and mortgage valuation volumes were 35% lower in Q2 2023 compared to the same period in 2019.

PROMISING

Simon Brown (main picture), Chief Executive of Landmark Information Group, says: “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.

“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.”