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.”
Comments (3)
A most useful article – well done Simon.
A toughening market – and one that was anticipated to correct itself. The last few years of insatiable demand aided by influencing factors such as; adrenalin shot stamp duty holidays, extremely low interest rates lower energy prices, cheaper build costs etc. The new reality dawns and values will need to significantly adjust to lubricate the market again. The Middle East setting down will of course help matters, but most economists agree much of the economic damage is yet to be felt.
A painful transition for some sellers, but for clients willing to take evidence-based sound advice there are good transactions to be converted, furthermore, commission %’s are rising. A flood of instructions to pick and chose from – time to work even smarter and concentrate on those clients who mean business.
Spot on, I couldn’t agree with this any more. The only thing I would add is we are seeing significant amounts of pent up demand, and with so few new houses being built, we could see a quicker bounce than expected. We need some stability, both domestically and internationally.
The biggest issue I find with new builds is not just the cheap/fast build and small rooms and gardens, it is the fact that my having people move into vacant properties, is stymies the market as there is no bottom of the chain FTB’s to buy to enable second time buyers to upsize.
All it does is put money in the pockets of the corporations, not help the housing market. There are a load of new-build opposite me, and their 3 bedroom semis are roughly the same size internally as mine, but with no more than half the outside space but at over £100k more than a conservative value of mine…