Back in June, when we released our Q2 property data in our quarterly Property Trends Report, the data reflected a relatively positive story. Overall, the market seemed to be moving towards a normal and balanced state, closer to the more stable conditions of pre-pandemic. From the sky-high levels of the past two years, boosted by the Stamp Duty holiday, demand was falling but remained just above 2019 performance. This indicated that appetite to buy was holding steady. And then at the end of September, just as we prepared to release the Q3 data, Kwasi Kwarteng’s mini-budget happened – and the markets reacted. At the time of writing, we await the new Chancellor’s autumn statement amid talk of tax rises, spending cuts and recession.
For the property industry, the repercussions will be keenly felt. What is clear, however, is that if we are to focus solely on newspaper headlines with their focus on disappearing mortgage products and fears of skyrocketing interest rates, it would be easy to believe that the housing market will shortly be in freefall. While there was and is certainly cause for concern, this is not the full story. And just as we recognise that data alone doesn’t tell the full story, now is one of those times where data will in fact add vital context to a complex and fast-moving scenario.
So let’s look to the last quarter – and hard data. Our latest Property Trends Report suggests that after several years of demand outstripping supply, supply volumes in Q3 actually exceeded demand as SSTC volumes lagged against listings. Listing volumes exceeded the 2019 benchmark for two consecutive months in August and September – the first time in 12 months. In other words, even before the mini-budget, the market dynamics were changing. Among many reasons for this, it is likely fuelled to some degree by still-strong prices pitched against a creeping sense of caution as the cost-of-living bites and interest rates on the rise – August alone saw two increases. In addition, Moneyfacts reported that 935 mortgage products - equal to 26% of all available products – were pulled in the 24 hours following the mini-budget, fixed rates have jumped massively from a historic low, pricing many would-be buyers out completely. This has been especially problematic for first time buyers who have saved and budgeted on the basis of low fixed rates that are simply no longer on offer. With demand slowing even before the shock of 23rd September, estate agents will be justifiably concerned.
But while interest rates are in the gift of the Bank of England, just as tax rises from the government are inevitable, there are some ways that estate agents can seize the initiative. Indeed, at Landmark we believe that there are three key action areas in which estate agents can mobilise now, in the face of market uncertainty:
The pandemic taught us to exercise caution when future-gazing; instead, we turn in times of flux to data, trends and tangible insights. At Landmark, we are in a privileged position, sitting at the heart of the property industry and able to review it and its challenges from the ground, backed by the more birds-eye view that our extensive datasets provide. With this multi-faceted perspective, we are able to identify and respond to the issues that matter most to industry players – and provide a measured account of what is really happening in the market amid the noise of newspaper headlines and punditry. Our data confirms that Q3 completions held steady against the previous quarter and that August/September SSTC were similarly strong - we would expect the majority to convert to completions in the Q4 data.
As we continue to respond to market forces and customer pain points through our innovative products and service, the trends data we faithfully collect and publish each quarter is a helpful temperature check for us all, particularly in this tumultuous period for property. Times may be uncertain once again, but with the right data at their fingertips, estate agents will undoubtedly draw on the innovative thinking and resourcefulness that helped them through the pandemic – and will prevail once again.Download Landmark’s Q3 2022 Property Trends Report for England, Scotland and Wales here:
*Landmark Information Group market research, September 2022 (sample: 503 recent movers in England, Scotland and Wales).