Predictions for the 2023 property market continue to vary wildly as economic and social issues continue to create uncertainty in the property market.
In the last week Estate Agency membership and training body Propertymark released its review of 2022 and predictions for 2023, RICS released it’s latest industry sentiment report and data from property portals Rightmove and Zoopla provide some early indications of activity at the start of the property transaction.
Certainly the sentiment is that December 2022 and January 2023 are less busy than December 2021 and January 2022. Anecdotally conveyancers remain busy, acknowledging that December was quiet but that January seems to have started with some renewed vigour.
According to RICS the number of new properties coming market fell through the final quarter of 2023 with the latest net balance of -23% representing the weakest return for this indicator since September 2021
New buyer enquiries are similarly down month on month which RICS says signals an ongoing weakness in new buyer demand across the UK.
“The latest RICS Residential Survey highlights the emerging challenges in the housing market as new buyers grapple with more costly finance terms and uncertainty over the outlook for the economy,”
said Simon Rubinsohn, Chief Economist, RICS, continuing:
“This is reflected in forward looking RICS indicators around both prices and activity. However, some signs of an easing in inflation pressures more generally could provide a chink of light, particularly for those looking to take their first step on the property ladder.”
GetAgent.co.uk has conducted its own research which corroborates this. Just over half (51%) of estate agents polled said that they are currently sitting on a lower level of for sale stock versus the start of 2022, with 45% also seeing a dip in the number of new enquiries from those looking to sell a home.
Buyers are also harder to come by with 57% of agents saying are less busy than they were this time last year.
Commenting on his research COO of GetAgent.co.uk, Mal McCallion commented:
“It’s far too early to tell just how the market is going to perform this year but an initial gauge of market health tells us that we seem to have picked up where we left on in 2022 with respect to a heightened degree of market volatility.”
adding
“Of course, these are all comparisons with what has been an incredible couple of years for the industry. As ever, transactions continue to occur at the right price across all localities.”
Rightmove began the year bullishly, claiming it had recorded its busiest ever festive period for home-mover activity, with buyer demand up by 23% compared to the same period last year. The number of new sellers coming to market was up by 21% on Boxing Day compared to Boxing Day in 2020 and was the highest number of new sellers on Boxing Day Rightmove has ever recorded
Tim Bannister, Rightmove’s Director of Property Data comments
“Boxing Day traditionally signals the start of activity ramping up as people turn their attention from turkey and trimmings to their plans for 2022, and activity is set to increase further as January unfolds and people start to settle down into a routine after the December break.
“Despite the frenzied market activity we saw throughout 2021, we’ve recorded even higher levels of buyer demand in the period between Boxing Day and the New Year this year, driven by a sustained desire to get on and move.
“Not only this, but the increased number of new homes up for sale on Boxing Day compared to last year, signals a new group of sellers coming to market who have made it their New Year’s resolution to move in 2022. This group may have held back last year due to the frantic market but are now seeing it as their time to take action, and have taken advantage of the high number of prospective buyers searching for their next home over the holidays.”
Property information provider Landmark have described a “market on hold” as it’s figures show listing volumes in Q4 remained at just 6% below 2019 levels in England and Wales. Moreover, those home movers who had financial flexibility and were committed to moving in the first half of 2022 were able to complete, with Q4 completion volumes remaining steady with that of Q3 2022.
They do warn though that to maintain a stable market, pipelines will need to be replenished in Q1 and Q2 of 2023. Propertymark figures suggest that there is an easing of supply as agents reported a slow but steady increase in properties available through the second half of 2022, leading into 2023, in contradiction to GetAgent.co.uk sentiment.
Landmark CEO Simon Brown commented:
“What the data shows us is that the pipeline is active, listing levels are strong, and existing transactions are still flowing towards completion. That paints an encouraging picture for home-movers in 2023. Everything is set ‘ready to go’ when mortgage rates stabilise.”
“For the transaction pipeline overall, the industry’s fragmented processes are still taking their toll. In fact, we can see that transaction times are still creeping up with it now taking 133 days on average to move home.”
Indeed conveyancing times is one of the main causes for concern for agents according to Propertymark as 48 per cent of members were concerned about the impact of the time it takes to move on vendors, with a knock on impact on fall throughs as mortgage offers expire and chains fall through.
GetAgent.co.uk’s research showed that 44% of agents reported an increase in transactions falling with amended mortgage offers on their list of concerns; no doubt affected by over half of agents who say they have seen an increase in the number of homes being down-valued by surveyors.
Pricing has already come under scrutiny with Propertymark research showing that viewings per property had fallen 71% per cent from April to December 2022. Despite Zoopla research which shows that 92% of properties in the UK has appreciated in value over the last 12 months, the cooling in buyer demand has resulted in 71% of estate agents believing that sellers are being unrealistic in terms of achievable pricing for their properties.
“The largest shift we have seen in the sales market is prices agreed, compared to normal asking prices. 2022, started as a seller’s market, and ended the year back to normality as a buyer’s market,”
says Nathan Emerson, CEO of Propertymark.
“The best price is usually achieved in the first four to six weeks of marketing, so we urge sellers not to compare their property to other homes on the market which may not have sold yet, and ensure they receive valuations from a qualified and accredited estate agent.”
Perhaps, to misappropriate a phrase from Ancient Greece, the only constant in the property market is change?
