A recent report has claimed conveyancers can expect transactions to rise by as much as 5% in 2023 with a market value increase of 4% despite the uncertainties that plague the market.
Within IRN Legal Reports’ UK Residential Conveyancing Market Trends Report for 2022, it is suggested that, with the cut to Stamp Duty Land Tax lessening the burden on homebuyers, the trend of transactions climbing incessantly during the first eight months of 2022 with continue into next year.
This comes in spite of the higher interest rates and continued concerns over the cost of living “[starting] to impact the market in 2023 [and slowing] property transactions considerably”, suggested IRN Legal. Explaining their optimistic forecast, they said:
“Despite the cost of living crisis, rising inflation, the fall in real incomes, and the prospects of increased interest rates, the residential conveyancing sector remained buoyant up to the end of August 2022. Relatively low interest rates in the first half of 2022, and the completion of deals started after COVID, has driven this strong activity.
There were interest rate rises to 1.75% at the start of August 2022 and again to 2.25% in September 2022 but these are unlikely to weaken demand too much throughout the rest of 2022. High conveyancing levels should continue for most of the rest of 2022.”
They did, however, concede that the Chancellor’s mini budget “has created some real market uncertainty, at least in the short term”, and with interest rates set to soar as high as 6% in the eyes of some, and 1,600 mortgage products being pulled by lenders within days of the mini-budget, IRN Legal say they “revised [their] forecasts downwards marginally for 2023 and beyond”, adding:
“Primarily, this is because we think that higher interest rates will, to a large extent, cancel out most SDLT gains especially for FTBs and lead to reluctance amongst some FTBs to push ahead with a property purchase.”
Yet, despite the very real threats to the housing market and some analysts predicting a “market crash” in 2023, IRN Legal still forecast a rise in transactions of 5% – a significant fall from the 10% growth predicted over 2022 once the year concludes, but encouraging nonetheless.
