It’s fair to say that 2022 was a whirlwind. We had three prime ministers, entered a recession and house prices in the UK reached some of the highest levels we’ve ever seen. With property prices now gradually falling from their peak levels, many are speculating that we can expect to see more significant drops, but what lies ahead for the property industry in 2023? Our clients give their opinions on what to expect.
Simon Cox, Founder and Managing Director of land agent Walter Cooper, comments:
“My main concern for the new year is, as always, issues in the planning sector. The government’s recent housing targets announcement has left me feeling less than optimistic about the state of local planning departments in 2023. The number of new developments which currently achieve timely planning permission is limited to say the least, and without a clear housing target in place and councils now having the ability to reject these targets entirely I can’t help but feel these levels will decrease further. Those councils already overrun by nimby attitudes will have now have an excuse to limit growth and development with little to no repercussions.
“On the whole, given the state of the country’s economy at the moment I don’t see housing being top of any government agendas for the near future leaving the market to tick along steadily, albeit slightly slower than previously, with limited major changes predicted for the foreseeable.”
Chris Heath, Managing Director of Manchester-based Cube Homes, said:
“I think we could see house prices drop by as much as 10% from the peak last summer, whether that all happens in 2023 or over the course of the next two years I am not sure yet. However, what I don’t see is a drastic collapse of the property market, I think it’s more likely to be more of a gradual dip.
“Despite all the scaremongering there are signs the economy is stabilising a bit – the pound has risen against the dollar and the price of diesel on the forecourts is starting to fall, so it definitely isn’t all doom and gloom despite what some commentators are saying. I do think some people are capitalising on the unstable market to put prices up much more than their costs have risen, and that kind of profiteering is very disappointing especially when it hits smaller businesses on tighter margins like ours.”
Rachel Lindop, Head of Sales at Dandara Northern Home Counties, comments:
“As we head into 2023, the biggest challenge currently facing the property sector is undoubtedly the cost of living crisis and current inflation rates, which we’ve already seen is hitting the first time buyer & investor market the hardest. I think this will remain hit and miss until interest rates begin to stabilise, and people feel comfortable that they have survived a Winter with increased bills. Once buyers feel more confident that they can afford these rises, which Government policy plays a huge part in, this will definitely help drive the market forward.”
The year of the first time buyer
Whilst 2023 may bring lower house prices, it doesn’t guarantee homeownership or make it more accessible according to Guy Burnett, Executive Director of Development at SO Resi. He comments:
“It serves well to remember that lower house prices do not necessarily make homeownership more affordable for first time buyers. As it becomes a less desirable sales market, less properties will become available to purchase, again this will send people in the direction of affordable schemes. Equally, many people will put off their home purchase for six months or more and try to ride out the uncertain market conditions.
“As the mortgage sector settles, we’ll expect to see the wider market start to come back to life in summer 2023, though I am confident that rates will not reach the historic lows that we have seen in recent years. With the race for space well and truly over, the apartment market is not expected to take the same hit, as buyers look for smaller homes that are well connected, more affordable, and cheaper to run. Against all odds, I believe that 2023 will be the year of the first time buyer, and shared ownership will continue to hold a major stake in making this possible.”
It’s fair to say that 2022 was a tough year for first time buyers, but looking ahead to 2023, does the picture look any brighter for those looking to secure their first home?
Lynda Clark, CEO of First Time Buyer Group, comments:
“2022 has certainly left first time buyers’ pockets lighter, for better or for worse, as this year has seen mortgage interest rates rise, the cost of living increase, but also the conclusion of Help to Buy, which has had a monumental impact on helping to bring homeownership within reach of first time buyers. While the faultlines of the cost of living crisis will run into the next year, developers and buyers alike who keep a steady hand in 2023 will find that there are still opportunities available for those who are willing to take the leap. Homeownership is still a fundamental right and aspiration for young people across this country, and I remain confident that the best time to buy is only when you can afford to. As we look to the year ahead, I would remind first time buyers that there are still many options available to help them, including shared ownership, which provides a low-cost route to homeownership. Newer schemes include Deposit Unlock and the First Homes scheme, and the stamp duty cut which will remain in place for the next two years, which will see first time buyers pay no stamp duty on the first £425,000 on the value of their home.”
With digital continuing to lead the way, Jeremy Heath, CEO of Spike Global, suggests that more will be done to help buyers manage their homebuying process using online portals. He says:
“Companies that have not yet embraced using digital technology to reach their audience are operating behind the curve. The big question for developers and BTR operators in 2023 is how to continue to remain attractive to customers within an increasingly competitive market. The ability to offer residents extra benefits goes a long way. By offering an easier way for them to manage their tenancy and enabling them to get the most out of where they live, will help developers to attract and keep residents.
“Residents’ portals such as Spike Living, provide a central place to manage everything from tenant requests, create communities within residents’ blocks via dedicated events and forums, manage room and front door access and even partner with local businesses. It’s a sense of keeping up with the Joneses, nobody wants to be the least evolved competitor in the market. When residents already manage the rest of their lives online, from banking to eating, why wouldn’t they want the same for their home?”
Sustainability and ESG
Phillip Hulme, Sales Director at Anchor, said:
“As we go into 2023, we are committed to doing more to meet the diverse needs of older people in a sustainable way. Our new homes are built with an EPC rating of B or above. We also provide support to our residents to combat fuel poverty and we are improving the energy efficiency of our existing homes while maintaining affordability. We are proud that 83% of our rented and care homes have a current EPC rating of C and above and we will continue to build on this next year.”