While 2022 was a year of two halves with a disastrous Mini-Budget sending the mortgage market into chaos our property experts suggest greener fields lie ahead in the Year of the Rabbit.

But for all of our experts the impact of the cost-of-living crisis has put a dampener on any early New Year celebrations. But for many hope still springs eternal.

SHARED OWNERSHIP

Guy Burnett, Executive Director of Development at SO Resi, says that in 2022 where the private market faltered, affordable house buying schemes such as shared ownership consistently demonstrated success in helping first-time buyers get onto the property ladder.

And Burnett believes now that Help to Buy has come to an end interest in shared ownership will only increase.

“For many first-time buyers shared ownership is the only true solution to the affordability crisis, offering a genuinely affordable route to homeownership in places people actually want to live in.”

Burnett also says that while it’s generally accepted that house prices will fall in 2023 it’s worth remembering that lower 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,” he says. “Equally, many people will put off their home purchase for six months or more and try to ride out the uncertain market conditions.”

DIGITAL

Jeremy Heath-Smith, Chief Executive of Spike Global, reckons 2023 could be the year for those yet to embrace digital technology to finally give way.

“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.

“With the new additions to the safety act coming into force in October 2023 developers and building management companies will need to be able to efficiently communicate with their tenants and for the tenants to easily access information.”

 “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?”

“Who wouldn’t want the hotel experience, with staff, parcels and amenities all at the touch of a button?”

FIRST-TIME BUYERS

Lynda Clark, Chief Executive of First Time Buyer Group, is all too aware that 2022 left first-time buyers’ pockets lighter, for better or for worse.

She says: “While the fault lines 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.”

Clark too is on the same page as Burnett and believes shared ownership schemes will be a great option for those looking to take their first step on the housing ladder.

“Shared ownership 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.”

AFFORDABILITY

Simon Cox, Founder and Managing Director of land agent Walter Cooper also recognises the impact that the cost-of-living crisis will have on affordability.

“With the cost-of-living crisis and recession continuing to take its toll, affordability will be key in 2023,” he says. “House prices are expected to decrease and what for many years has been considered a sellers’ market may take a turn, with offers below the asking price already starting to be accepted as many buyers attempt to tackle increasing mortgage rates.

“I expect 2023 will see the return of a more balanced market as housing stock and sales numbers decrease back to pre-pandemic levels.”

Cox also believes larger housebuilders will find themselves in a more stable financial position than the previous recession, as a result of the booming market over the last few years.

He adds: “Given this, I expect to see a continued demand in the land market from those companies looking to take advantage of the falling price of land. This is likely to have an impact on the wider industry, as SME housebuilders, who will be more affected by rising material costs, struggle to keep up with the competition allowing the top PLCs to take monopoly of the new build market.”

But he warns that the government’s recent housing targets announcement is far from ideal.

He says: “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.”

PRICE PLUNGE

Chris Heath, Managing Director of Manchester-based Cube Homes, says that despite the widely forecasted house price plunge of 10% from the peak of last summer he doesn’t see is a drastic collapse of the property market.

He says: “I think it’s more likely to be more of a gradual dip. Despite mortgage rate rises and the cost-of-living crisis, people will always need to move home at key times in their life – when they get married, have kids, get divorced or buy their first property.”

And he adds that 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.”

DOWNSIZING

Phillip Hulme, Sales Director at Anchor, expects an increase in enquiries regarding downsizing as the cost-of-living crisis continues to pinch.

“Potential buyers may be thinking about leaving homes which are becoming internally unsuitable and disconnected from amenities, public transport and social infrastructure, factors which grow in importance as people age.

“As ever, it’s important to consider downsizing as ‘rightsizing’, finding the right sized property which fits both physical and financial needs. I think this will become increasingly true as people may plan to make a move earlier than expected due to economic pressures.”

But he adds that there is still work to be done in raising awareness about housing options.

“Our polling research this year found that only 20% of respondents fully understand what is available and a third (36%) had very limited understanding. That has to change in 2023,” he says.

COST-OF-LIVING

Rachel Lindop, Head of Sales at Dandara Northern Home Counties, is another that thinks that the cost-of-living crisis will have a huge impact on the year ahead.

“The 2022 property market was the best I have witnessed in my fifteen years in the industry,” she says.

“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 and 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.”