By The economy has faced a tumultuous year.
In fact, 2022 might well go down as “the year of the crisis”.
But, despite all the negativity we’ve seen, the property market remained stable.
House prices just kept on rising in 2022, shaking off any short-term pessimism. Across all property types, average prices in the UK rose from £274,073 in January, to £294,599 in September, according to Land Registry data.
In October, Halifax had the average house price at £292,598.
Nationwide had it at £268,282, with the latest analysis from Rightmove putting newly marketed homes at £366,999.
While the methodologies may differ, the trend is the same. Prices increased over the last year or so.
Demand also held strong, especially from buyers eyeing up specific opportunities.
Foreign investors, including those from the US and Singapore, flooded the capital with money.
New-build demand is also helping to keep the market afloat, with buyers likely weary of older homes not being “green” enough for the modern world.
Certain property types are also seeing plenty of interest from investors.
Even with all the dire headlines we’ve seen in the press. New builds are flying off the shelves in regions such as East Midlands, the West Midlands, Scotland, and the East of England.
What’s more, pent-up demand has pushed property investment in London to £2.8bn. The highest amount seen in 7 years.
Across the UK, JLL found annual investment in the living real estate sector exceeded £10bn in the 3rd quarter of 2022, putting us on track for a record year.
This was driven by the rental market, with build-to-rent investments proving especially popular with buyers.
And let’s not forget, all this demand occurred in a state of perma-crisis.
Inflation is sitting at 11.1%, while the base rate reached 3% in November.
Outside of our finances, we’ve seen instability in Westminster, with wave after wave of resignations, and an infamous “mini-budget”.
Fortunately, the worst of all this may soon be behind us.
As we move into 2023, the property market could be sitting on stronger foundations than many may assume.
There could be plenty of opportunity over the next 12 months, so long as investors prepare themselves for new challenges ahead.
Get ready for 2023
Many experts expect house prices to fall in 2023.
This doesn’t necessarily mean the market will struggle, however, there’s plenty of support on the horizon.
Investors could be incentivised to act quickly and take advantage of short-term discounts.
Indeed, from 2024 onward, prices may rebound.
From next year, legislative changes will likely encourage activity in the market. Capital gains tax and dividend allowances will be rolled back from April.
Property owners may want to sell up before the new rules are put in place. This may create opportunities for investors.
Further down the line, stamp duty perks will also end, potentially pushing more selling to enticed buyers.
This could all tie in well with the Help to Buy deadline. Help to Buy Equity Loans must be used by March 31, 2023. We could see a last-minute rush in the opening months of the year.
Changing legislation will also hit property owners in ways they may not even be aware of.
Many landlords are unaware of new environmental standards they’ll need to adhere to.
What’s more, from April, creditors will have more freedom in how they get debts repaid from struggling businesses.
Smaller companies were protected from insolvency measures throughout the pandemic, but these protections are being wound down.
Property investors making purchases via a corporate setup could face some difficulties if their books aren’t balanced.
And with Michael Gove back as the secretary of state for levelling up, stricter rules could be on the way.
Mr Gove wants the Renters Reform Bill introduced next year, less “ugly homes” from developers, and is committed to finally hitting the infamous 300,000 housebuilding target.
Ultimately, how the property market and wider economy fares will be dependent on the ongoing cost-of-living crisis.
The fallout from the invasion of Ukraine has pushed energy bills sky high, but respite could be on the horizon.
Europe is making moves to be less reliant on Russian gas and in the UK, inflation could start to fall from the middle of 2023.
As we’re all aware though, economic predictions are hard.
Few were able to see war, record breaking rate hikes, or a global pandemic coming.
We can only adapt to an ever-changing world – and this is where specialist finance will prove itself crucial for the coming year.
In 2022, we consistently lent to those hit by gazumping tactics, turned away by mainstream banks, and commercial investors wanting to bounce back from the pandemic.
We’ll do the same for those who want to jump on reduced prices, fix up their properties for new EPC rules, or get ahead of looming legislation in 2023.
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