Landmark [1]’s newly released Q3 Residential Property Trends report offers a comprehensive analysis of property data from the third quarter of the year, examining the entire residential property transaction chain – making it the most extensive cross-market analysis of the property sector in England and Wales.
Despite indications that inflation and interest rates may be heading in a more positive direction, the data for Q3 shows a subdued market as the usual post-summer uplift failed to materialise.
Continued market uncertainty and affordability issues had a continued impact on Sold Subject to Contract (SSTC) levels in the last quarter, with September seeing the biggest negative variation to the pre-COVID benchmark of 2019 so far this year at 49% down vs 2019 levels.
Similarly, this muted cross-market picture can be seen at valuation stage, with valuation volumes failing to improve (38% down on 2019 levels in September) – further demonstrating the affordability constraints home-movers are facing.
However, despite the overall picture of a flatter market, supply remains relatively healthy as we head into Q4. Listings were 3% higher than 2019 benchmark levels in September.
Simon Brown, CEO of Landmark Information Group, said: “Amidst the ongoing challenges of the economic landscape, our data paints a picture of an unusually muted yet stable market. The post-summer bounce back we would usually expect to provide a boost going into Q4 hasn’t yet happened, leaving the market in a remarkably flat position. While this stabilisation means an end to the volatility of previous quarters, it also leaves us in unchartered waters, with few in the industry remembering such a prolonged period of stagnation. However, we are operating in a resilient market, meaning growth will eventually return. For now, we wait to see what the external landscape brings in Q4.”
Key findings from the report
Cross market activity
- Listing volumes in Q3 ‘23 have remained relatively strong with both August reporting a 2% increase and September showing a 3% increase on the same months in ‘19.
- SSTC volumes in Q3 ’23 tracked 36% below Q3‘19.
- Search order volumes in Q3 ’23 recovered slightly over the quarter but were still 36% down on Q3 ‘19 volumes in September.
- Completions levels in Q3 ‘23 were 4% higher vs Q2 ‘23 but 35% down compared to Q3 ‘19.
Listings data
- Listing levels crept over the 2019 benchmark in both August and September, with August reporting a 2% increase and September a 3% uplift on the same period in ‘19.
- Supply is consistent with Q2 ‘23 levels, 1% up over the last 6 months.
SSTC
- SSTC volumes in Q3 ’23 tracked 36% below levels seen in Q3‘19.
- Although SSTC volumes rose by 6% in August ‘23 on the month prior, this was a reflection of an unusual drop in SSTC levels seen during August ‘19.
Property Search to SSTC
- Supply is in a relatively positive position with levels 3% lower in July ’23 vs ’19 and 3% higher in Sept ’23 vs ’19.
- However, demand is struggling with volumes 38% lower in July ’23 vs ‘19 and 39% lower in Sept ’23 vs ‘19.
Mortgage valuations to approvals
- Higher borrowing costs have cooled demand, resulting in a decline in both mortgage volumes and approvals this quarter.