New data by UK data agency TwentyCi shows that the housing market is as active as the last two years with 358,149 sales agreed in the second quarter of 2022.
With 10.3% more sales agreed in Q2 of 2022 than in the same period in 2019, the property market seems to be buckling the trend. While the wider economy is shrinking, the housing market is buoyant.
TwentyCi’s Property & Homemover Report suggests that if this level of activity is sustained, we could hit 1.2 million transactions in 2022.
Our previous observation that the owner-occupied sector appears to be detached from the woes that are befalling the wider economy continues to hold true. Transactional levels remain greater than 2019 and we are yet to see a sharp re-calibration of the residential property market in either price or volume.Colin Bradshaw, Managing Director at TwentyCi
The report compares this year’s data with figures from 2019, because the past two years have been so out of the ordinary, that a comparison would have little value. Through the pandemic and stamp duty holiday, the property market was artificially stimulated.
All Regions In The UK Have Seen Number Of Sales Agreed Increase
While on average the number of sales agreed is 10.3% higher, in the different regions the figures vary considerably. Inner London has seen the biggest increase with 27.6% more agreed sales than in 2019.
Followed by the North East with a 19.2% increase and the South East with a 16.1% increase. Outer London has seen an increase of 15.6%.
On the other end of the scale is Scotland with only a slight rise of 3%, Northern Ireland with 3.9% more sales agreed and the West Midlands with a 4.6% increase.
Most cities have also seen an increase in activity. With all but Edinburgh and Glasgow having seen increased levels of sales agreed. The two Scottish cities have seen a 0.3% and 0.4% decrease respectively.
All Activities Have Seen Increases Apart From Stock Levels
The number of exchanged contracts has risen by 13.8% from 215,007 exchanges in 2019 to 244,611 in 2022.
As a consequence of the rise in transactions, the number of sales that have fallen through has also risen, by 9.7%. This is to be expected, given the high transactional levels.
However, there was a significant drop in price changes, where a seller puts up their house at a discounted price to achieve a quicker sale, from 256,168 properties in 2019 to 140,715 in 2022 or a 45.1% decrease.
Because we are still in a seller’s market, the need for price changes has been removed.
Equally, the number of withdrawals has also dropped sharply by 35.2% compared to Q2 in 2019. With properties selling quicker than in previous years, the need to remain in the existing properties is reduced for sellers.
On the other hand, new instructions are down by 5.9% in Q2 of 2022 compared to the same period in 2019. While there were 455,593 new instructions in 2019, this year there were only 428,935.
The supply side issue of the right stock at the right price persists and buyers and sellers are desperate to keep chains intact or indeed willing to break chains to keep their buyer or seller happy. How much longer can it last? Perhaps this is now the new normal?Colin Bradshaw, Managing Director at TwentyCi
The report points out that the low stock levels prevent potential sellers from entering the market, because they are unable to find a suitable onward purchase.
Another reason for the continued low stock levels could be the pressure on household finances, with rising inflation, increasing interest rates and the hike in energy prices.
While stock levels have recovered somewhat from last year, they are still below the levels from 2019. But there are signs that the number of properties coming on the market is starting to increase.
But the report shows that the available months of stock are still almost down by half of the historic norms.
Most regions have around two months’ worth of stock available. Inner London, again, bucks the trend with just over three months. Northern Ireland has two and a half months.
Average Price Has Risen By Almost 20%
With the number of sales agreed so much higher and the stock levels so low, the average property price has risen by nearly 20% in two years. In 2019 the average price was £360,000, in 2022 this has risen to £433,000.
The biggest increase in sales asking price has been seen by Wales, with a rise of 29.2%. Followed by the South West and the North West, with an increase of 24.8% and 24.6% respectively.
Yorkshire and The Humber, East Midlands, West Midlands and the East of England have all seen asking price increases by over 20%.
Northern Ireland has had the lowest increase compared to 2019 with 4.3%. Inner London has also only seen a modest rise of 8.3%.
The lower performance of Inner London is a result of the pandemic, because so many people were leaving the city in search of more space.
If the number of sales agreed continues to rise, we might reach 1.2 million transactions in 2022. So for the time being, the property market is still going strong. But there are signs of a slowdown.