Property market 'unusually flat' despite stable supply

Landmark’s latest report analysed Q3 property data and found that the usual post-summer uplift failed to materialise.

Related topics:  Property,  Housing market
Property | Reporter
24th October 2023
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"Amidst the ongoing challenges of the economic landscape, our data paints a picture of an unusually muted yet stable market"
- Simon Brown - Landmark Information Group

Despite indications that inflation and interest rates may be heading in a more positive direction, the data for Q3 shows that the market has remained largely subdued.

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 the 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.

Cross market activity

The report found that listing volumes in Q3 ‘23 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 the same period 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, while completions levels in Q3 ‘23 were 4% higher vs Q2 ‘23 but 35% down compared to Q3 ‘19.

Listings data

According to the 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.

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.”

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