The property market in England has undergone significant fluctuations over the past seven years, reflecting broader economic conditions, policy changes, and global events. Using data from the Land Registry, the attached chart visualizes the trends in property sales from 2017 to 2024, offering a clear view of how the market has evolved. Here, we’ll delve into the key trends observed in this period.
1. Steady Market Before 2020
Between 2017 and 2019, the property market in England displayed a relatively stable pattern. Sales volumes fluctuated but generally stayed within the range of 60,000 to 80,000 transactions per month. This period of stability can be attributed to a relatively stable economic environment, with low-interest rates and consistent consumer confidence in the housing market. The occasional peaks and troughs in this period were typical of seasonal trends and did not indicate any major disruptions.
2. Impact of the COVID-19 Pandemic (2020-2021)
The onset of the COVID-19 pandemic in early 2020 marked a turning point in the property market. The initial lockdown in March 2020 caused a sharp decline in property sales, as the housing market was effectively paused. This is evident in the chart, where sales volumes plummeted to around 40,000 transactions.
However, the market quickly rebounded later in 2020, fueled by government interventions such as the Stamp Duty Land Tax (SDLT) holiday, introduced in July 2020. The SDLT holiday provided significant tax savings for buyers, which led to a surge in demand. This policy-induced demand spike is clearly visible in the chart, where sales volumes reached an unprecedented peak of over 160,000 transactions in early 2021.
3. Post-Pandemic Adjustments and Continued Volatility (2022-2023)
Following the end of the SDLT holiday in June 2021, the market experienced a sharp correction, with sales volumes dropping as the demand softened. However, the housing market did not return to pre-pandemic levels immediately. Instead, there was a period of volatility, with several peaks and troughs visible in the chart from mid-2021 through 2022. This period was marked by ongoing uncertainty, including economic concerns such as inflation, interest rate hikes, and the cost-of-living crisis, all of which impacted consumer confidence and purchasing power.
4. Market Slowdown in 2024
As we approach 2024, the data suggests a continued decline in property sales volumes. This trend could be indicative of several factors. Firstly, the effects of rising interest rates have likely cooled the market, making mortgages more expensive and less accessible to potential buyers. Secondly, the broader economic environment, with concerns about inflation and economic growth, may be contributing to reduced consumer confidence.
This downward trend towards 2024 suggests that the market is entering a phase of correction after the highs experienced during the post-pandemic boom. The sales volumes at the beginning of 2024 are significantly lower than in previous years, potentially indicating a shift towards a more subdued property market.
5. Future Outlook: Potential for Recovery?
Looking ahead, it’s uncertain whether the market will stabilize or continue to decline. Much will depend on the broader economic conditions, government policies, and how the market adjusts to the post-pandemic reality. However, there is room for cautious optimism if interest rates begin to improve. Should borrowing costs decrease, this could make mortgages more affordable, potentially reigniting buyer interest and driving a recovery in property sales volumes.
Potential first-time buyers might find opportunities as prices stabilize or decrease, but affordability issues could persist if interest rates remain high. Conversely, if rates do ease, we may see a resurgence in market activity as confidence returns and more buyers are able to secure financing.
In conclusion, the property market in England has been shaped by a mix of economic conditions, policy interventions, and global events over the past seven years. From the stability of the pre-pandemic years to the volatility induced by COVID-19 and its aftermath, the market has demonstrated resilience but also the potential for significant swings. As we move through 2024, the data suggests a cooling period, one that might define the property market’s trajectory for the foreseeable future—unless a shift in interest rates breathes new life into the market.
Source of data for graph: Land registry : Sales volume by type of property in England
—————-
Please note that this article is for guidance purposes only and does not constitute legal, financial, or professional advice. Always consult with a qualified professional for advice specific to your situation.
While every effort is made to ensure that the information provided on this blog is accurate and up to date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. Please verify any information before acting on it.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
