We’re sure many would agree that it’s been quite the year in the property industry. At the tail end of 2021, few could predict what would lay in store for 2022…though many tried. It’s safe to say that most predictions were wide of the mark, our own included, although some did appear to hit the nail on the head.
As 2023 looms large, experts from across the industry and property-adjacent sectors have thrown their two cents in again to try and make sense of the road ahead. We’ve collected a handful of predictions for the new year, with some of our own forecasting for good measure, looking at what this all means for our corner of the property industry.
Planning
Graham Norwood, Editor of Letting Agent Today and Landlord Today: “Michael Gove was the housing secretary who led the government retreat from radical reform in 2021’s planning bill following widespread opposition from Tory MPs. He was also, of course, a supporter of Brexit which appears partly (perhaps more than partly) behind the labour shortage in the construction industry. So what an inspired choice by Rishi Sunak to bring back Gove in November to lead the next planning backtrack. Yet more cave-ins, following the housing target face, will likely feature in 2023 as Tory backbench rebellions continue to determine policy. Expect to see less house building in 2023 than in 2022.” – Read the article
Selling
James Forrester, managing director of Barrows and Forrester: “While the focus is often on house prices, it’s the transactions these prices are agreed on that fuel the furnace of the property market. In 2021, we saw huge peaks of up to 165,000 homes sold per month and while this has subsided in 2022, we’ve seen a far more settled, consistent level of homes sold on a monthly basis – between 60,000 to 75,000 per month. We also expect rental values to remain robust, climbing by between 5 to 8%.” – Read the article
Chris Hodgkinson, managing director of House Buyer Bureau: “Those entering the market to sell will still be able to find a buyer due to the shortage of stock available. But while this continued imbalance between supply and demand will allow them to sell, they will no longer hold the power where negotiations are concerned and will find the hefty premiums secured during the pandemic market boom are no longer on the table.” – Read the article
Interest Rates
Robert Gardner, chief economist at Nationwide Building Society: “Financial market conditions have now settled with long term interest rates returning to the levels prevailing before the mini-Budget. However, mortgage rates are taking longer to normalise and activity levels in the housing market have shown few signs of recovery and house prices saw three successive monthly declines since September – the worst run since 2008. The recent weakness may, in part, reflect an early start to the usual seasonal slowdown, with potential buyers opting to wait until the New Year to see how mortgage rates evolve before looking to transact. But it will be hard for the market to regain much momentum with economic headwinds set to strengthen, as real earnings fall further, the Bank of England moves interest rates higher and with the labour market widely projected to weaken as the economy shrinks.” – Read the article
Buying
Nick Leeming, Chairman of Jackson-Stops: “Many lockdown legacies remain, in particular the race for space as flexible working is accepted as a permanent staple. This means buyers in 2023 are looking for family homes that are bigger, with an office room or garden large enough for a standalone studio. The flexibility to work from home has made buyers more open minded, both on location and property type. Whereas once it needed to be within walking distance of a station for the daily rat race, now to be within just a few miles drive of a major train station will often suffice, opening up a plethora of new properties in the process. For young professionals that may struggle to buy their first home in cities such as London or Bath, applying for jobs that only demand them to be in the office part-time opens up many more avenues of their property search; a real plus for the UK market more broadly.” – Read the article
It’s clear to see a reluctance for positivity in the early predictions for 2023, though few can be blamed for that. It’s been an unsettling few years for the property industry, whether that’s in estate agency, surveying, construction or virtually any sector that runs alongside property in some way.
Although the experts quoted here range from journalists to economists, there appears to be a consensus regarding the inevitable cost to the consumer. Of course, in the property industry, everything trickles down eventually – the buyers and the sellers often feel the pinch worse of all, which then flows back up the chain through the agents to the landlords, on to the property developers and the lenders.
So where does this leave us?
Well, it’s not all doom and gloom. The truth is, many experts are quick to admit that the property industry has endured the worst. In early 2022, we saw this clearly when we were enabling overworked agents with the tools they needed to make light work of their heavy caseloads, before observing a relative decrease in the volume of inspections, which then plateaued throughout the year before the customary winter spike. What we noticed, above all else, was a need for agility, to be able to roll with the punches and take the highs and the lows without causing undue stress to the business or the professional.
Going into 2023, here at Inventory Base, we feel that’s just as important. While fixing the dominant, overarching challenges like high interest rates and the cost of living crisis is a tough ask for anyone, those working at the coalface of the property transaction process need to be flexible and agile, something that is easily achievable through technology.
What are your predictions for 2023? Do you think we’re ready to take to the new year with a renewed sense of agility and stability, and are you prepared?