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"Kate Faulkner says we need to look at transactions to show the real state of play"


"Kate Faulkner says we need to look at transactions to show the real state of play"

Property Transactions: A Different Story Amid Falling Prices


Amid recent headlines about falling property prices, property expert Kate Faulkner emphasises the importance of looking at property transactions to gain a more accurate perspective on the real estate market's state.


As reported by The Negotiator, while there has been a lot of noise recently about property prices declining, Kate Faulkner suggests that examining property transactions is more telling. Transaction data, from mortgages to properties sold subject to contract and finally sold, shows a more dramatic picture from a year-on-year perspective.


Here are some key points she highlights:


HMRC Transactions: Non-seasonally adjusted figures show a 22% decline compared to July 2022, while seasonally adjusted figures are down by 16%.


Mortgage Transactions: The number of mortgage approvals during the first half of this year is 29% less than the same period in 2022.


Faulkner points out that comparing 2023 to 2022 or 2021 might not be appropriate, as the last two years saw unusually high sales activity, making 2023's transactions appear lower.


Various forecasts predict different transaction numbers for 2023, with Savills anticipating 870,000 sales and Zoopla projecting 1 million. Faulkner suggests that we might see a drop of 6% compared to the "norm" of 1.2 million sales until the end of June, with a 15% fall from July to the end of the year. This would mean that transactions could reach 1.1 million, possibly surpassing Zoopla's forecast.


However, regional variations play a significant role, and some areas are more affected than others. Affordability, mortgage activity, and the type of buyers (first-time buyers, movers, or investors) all influence transaction numbers.


Nationwide's data reveals that cash transactions are more resilient, remaining slightly above pre-pandemic levels in 2019. The data also indicates that different property types are experiencing varying levels of transactions, with detached houses seeing the most significant decline. Buyers are adapting to higher mortgage rates by opting for smaller, less expensive properties.


Understanding the market, who is buying, and what is selling well is crucial for the industry in 2023. Adapting to the changing landscape by targeting cash buyers and first-time buyers with smaller properties may be the key to maintaining momentum, but the approach may vary depending on the region.


For a more comprehensive overview, refer to the original article on The Negotiator



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