The housing market is facing a growing activity crisis, with property transactions falling to their lowest level in five years, according to newly released government figures.

The latest data shows sales volumes have dropped by almost 40% since 2021, prompting fresh concerns about the health of the market despite house prices remaining relatively resilient.

Simon Gerrard, chairman of Martyn Gerrard Estate Agents, warns that the collapse in transaction levels now represents the industry’s biggest challenge, arguing that a lack of movement is doing more damage than fluctuations in property values.

Gerrard said urgent measures are needed to stimulate activity, warning that a stagnant market affects buyers, sellers, agents and the wider economy alike.

He commented: “These figures show an increase, but it’s not at all reflective of the market. These are a comparison to the same time last year when the there was a large fall in house prices following the removal of Stamp Duty relief last year. The data is inherently backward-looking and doesn’t fully capture the loss of momentum that we’ve seen over the last couple of months.

“The key thing the figures show is the fall in transactions with sales volumes at the lowest they’ve been for five years. The data shows a nearly 40% drop in transactions since the same period in 2021. This is the biggest concern for the market right now. Action is urgently needed to get the market moving again.”

Gerrard believes that Rightmove’s latest figures, released earlier this week showing the biggest June asking price fall in 14 years, arguably provide a more accurate snapshot of the current direction of travel; the market has softened considerably, and confidence remains in critically short supply.

He continued: “The housing market doesn’t like uncertainty, but right now, that’s exactly what buyers are facing. People are hesitant to make major financial commitments, such as a property purchase, whilst there is so much economic and geopolitical instability.

“That said, if the news is to be believed and the Strait of Hormuz soon reopens fully in practical terms, there is a real opportunity for things to pick up and for the market to regain some momentum.

“Greater global economic stability will only benefit the housing market by easing concerns around inflation and interest rates, hopefully encouraging buyers back into the market.”

New warning signs for housing market as sales fall and supply soars