It’s safe to say 2022 has been a busy year for property. We’ve seen multiple budget announcements, energy rate rises and mortgage rate rises which have all come at a difficult time for household finances. Many of these changes have made it harder for households to afford to buy a property. Especially teamed with the increasing property prices which we saw earlier in the year, which came as welcome news to many sellers.
As the year comes to a close, buyer demand has fallen to levels we’d usually expect to see around Christmas. There are already expectations that we will see further interest rate rises from the Bank of England in 2023 and this, teamed with inflation, has many people worried about property prices.
So we take a look at the current sales and rental market and look at predictions for the future. 2023 is set to be an interesting year…The lettings market is stock-strained and agents are reporting around 36 enquiries per property on average. This increases the competition between tenants and means that some high-demand rental properties are fetching higher rents than anticipated.
According to Zoopla*, properties in Nottingham saw the steepest annual increase of 10.5%, compared with house prices in London which grew by just 4.4%. Scotland’s Aberdeen was actually the only city where house prices dropped in the year to October, decreasing by 1.1%. Housing stock however has increased this year – with Zoopla stating that, in the four weeks to 20 November 2022, 40% more properties were added to Zoopla than during the same period in 2021.
According to Zoopla, some properties are already undergoing modest price reductions and the property portal does expect them to decline further in 2023 - with predicted house price falls of up to 5%. This will be most prevalent in more expensive regions of the UK such as London and the South East. If you're thinking of selling, it’s certainly worth getting an up-to-date valuation. It takes just 60-seconds…
Richard Donnell, director of research at Zoopla, said: “We still expect price falls of up to 5% in 2023, with one million sales and mortgage rates dipping below 5%. But the number of sales going through will remain buoyant.”
Tenants are trying to secure viewings for properties as soon as they become available, and the stock shortage means there’s a huge number of enquiries. The number of enquiries is pushing up tenant prices which is causing slight unease amongst tenants. In fact, almost half of tenants (46.48%) are concerned that the current economic climate could impact their ability to pay rent as the crisis continues.*
The 2023 housing market could present great opportunities for landlords and investors. The huge increase in tenant demand coming down from first time buyers who are choosing to rent teamed with the potential decrease in property prices proves positive for some landlords.
Correct time of publishing - 15/12/22
