New Homes Index: Proper(ty) Chrimbo

A year in review

When so much changed so quickly at the start of March, the absence of actionable real-time insight about the state of the property market and the wider economy was one of many issues facing our clients. To counter this we began analysing and writing about our index of digital marketing metrics, sharing what this revealed about the changes in consumer sentiment, and what that might mean for the market.

We’ve been reporting on our New Homes Index regularly in the past nine months, seeking to understand and share the impact that Covid-19 has had on our developer pool’s analytics and ad platforms. With an end (of sorts) vaguely in view and in the spirit of the prevailing mood of reflection that creeps in every December, a look back on the pandemic as a whole is inevitable and, hopefully, valuable.

The chart below shows the monthly flow of web traffic in 2020 against 2019 and highlights just how events in March created unprecedented waves of engagement in what had previously been a relative mill pond. This volatility noticeably disrupted the comparatively ‘flat’ trend of the previous year, which had suggested that seasonal peaks in web traffic no longer exist within the sector.

Monthly NHI tracker – Web Sessions

Locking down November’s figures

Against the backdrop of a second national lockdown, November’s overall web sessions from our developer pool were down 14%. High-intent goals, focused on actions concerning appointments to view, dropped by 15% MoM.

Looking at November’s daily web session average; historical data from more ‘normal’ years would have us forecast a 1% increase compared to October. In 2020 we actually saw an 11% drop MoM. After the first week of December sessions were tracking at around -18% down on November, whereas in 2019 the difference was -12%. The trend here is clear, but the inference to be drawn is, as yet, not. With the market transported overnight into a land of milk and honey once lockdown 1.0 ended, some of this decrease might well be attributed to a regression towards the mean: the period from June to October was so much more buoyant in 2020 that as the ripples of this disruption recede, the early days of a fall in market conditions and the impact of lockdown 2.0 will both look very much like a return to the status quo ante.

Daily NHI tracker

Conversion rates of web sessions to high-intent conversions have been holding steady but are starting to decrease. This decline in sessions – following the dramatic peaks seen in May-July post-Lockdown 1.0 – is starting to be felt and may have a marked impact on conversion rates into Q1, or at least on the high levels of engagement we’d usually anticipate in this period. In perhaps the final redoubt of seasonality to be found in this marketplace, increased upper-funnel activity in the build up to Christmas normally helps to bolster transaction volume in January, which is generally sustained through to March.

This pattern is echoed in Google’s indexed ‘real estate’ search volume trends for the UK. In 2019, October into early November was a period of peak popularity for search interest, but there hasn’t been a repeat this year – against the backdrop of a surge in interest experienced across the sector when moving house became an allowable activity during May. Again we cannot tell at this point whether we are witnessing a regression to the mean following an outlying few months; the harmful but time-limited impact of the second lockdown; the harbinger of a tougher market in 2021; or some combination of the three.

Google Trends

Source: Google Trends – Real Estate (topic)

Variegating traffic volume by source, we can also see a clear overall direction of travel. Investment levels were broadly consistent across the period shown, with the fluctuations in session volume driven for the most part by the effective costs per click available in the market and the concomitant changes to click through rate, that in turn reflected the relative levels of enthusiasm for our clients’ messaging through the months.

The truth of this is evidenced by the coextended lines for organic search and the main biddable channels, PPC and social. As the volume of sessions resulting from organic search has fluctuated over the last six months, the performance of the biddable channels has broadly followed suit. The overall volume of sessions and the trends concerning this value are emergent properties of the market sentiment that has influenced the efficacy of these key traffic drivers.

Web sessions by channel (last 6 months)

What next?

Digital engagement levels over Christmas week and into early January are habitually a valuable bellwether for sales volumes over the key Jan-March period. While we’re wading through unknown waters, that will be more true this year than ever before. However, with Q1 generally well sold across the market thanks to the buoyant market through Q3 and the scheduled changes to SDLT and HTB, the import given to any inferences drawn from these engagement levels may be less than in other years.

As current business is already secured, what is at risk here is slightly further afield but no less vital for that: upper-funnel engagement and high-intent conversions in January will be populating sales ledgers for the period beyond March, when the stamp duty holiday has ended, when HTB has been reshaped, and when sales may be harder to come by. With this likely coinciding with the reopening of society following mass vaccination, a strong January will be essential to protect share of an extremely competitive market over the late spring and into summer.

We plan to keep a beady one planted on the NHI during the first few days of the new year and will have a further update to share in early January.