What will happen in 2023 to the property market ?
Don't fancy reading? Watch our short video!
In the absence of a working crystal ball, our partners at FSS, having worked within property for a combined 90 years, can certainly offer a few “nuggets of wisdom” to you all. History certainly seems to have a habit of repeating itself, so, what exactly can the past tell us about the future?
“2022 has been an excellent year for the property market” reports partner of FSS, Richard Smailes. He says, “as always we have had both ups and downs and it was amazing what the mini budget did, it really rocked people, interest rates immediately started to climb and everybody thought ‘here is another 2007/2008 recession heading our way’, but confidence definitely came back and property is still seen as a very safe investment.”
Richard reflected on Covid 19 and the positive effect this, in turn, actually had on the property market, he said, “during the Covid crisis, the government did an incredible job for the property market, they really looked after the property buying public.” People during Covid had a variety of circumstances causing activity in the housing sector. For some, the time Covid gave us, made us re-think what we needed from our homes and so a number of properties came to the market, which in turn enticed others to move. For others it gave the necessary time to develop and improve their properties, increase their value and sell them. Whatever the circumstance, the time Covid gave us, certainly meant that the market was hot.
Where there’s an increase in demand, there’s an increase in price, Simon Croft, partner at FSS added that, “if you have been lucky enough to own a property, you will have seen the value increase dramatically over the past few years, so you’ve certainly been successful if you are already in the market.”
Based on expert projections, there is no doubt that buy-to-let property investments are still a viable option in 2022 and into 2023. The landscape may have changed, but property as an asset can still provide excellent long-term growth for investors. Buy to lets have always been popular income streams, Simon mentioned “we are still seeing a huge demand from tenants, and rental values are increasing ahead of inflation at the moment, so return on investment is good”.
FSS are in a strong position for 2023, covering all areas: commercial, auction, residential sales, lettings and surveys. The commercial property investment remains an exciting opportunity, with much emphasis on transforming existing commercial spaces to suit business tenants and customers as they adapt to a changing climate. Dan Brumfitt partner at FSS states that “the commercial market has held up as well and I am hopeful this will carry on and what I’m seeing is a huge demand for mixed use properties, the usual commercial downstairs residential upstairs units and I believe this trend will continue into 2023”.
Richard our auctioneer also reports on auctions, he says “its been a reasonable year for auctions, particularly for property that is in need of comprehensive work, the buyers has got the finance in place and want to get on with it and buy it, hammer down, deal done!”
Okay so, what about 2023 then? We are being bombarded with negative news headlines. Are our partners hopeful for 2023? Richard said, “banks were tying up money and weren’t prepared to lend, they wanted their property debt down, but suddenly now, we are in a situation where they’re reintroducing 95% loans. One would suggest that the media hype is just media hype rather than the banks agreeing, because if they did they certainly wouldn’t be lending at 95%.”
Dan Brumfitt added, “Harrogate is an affluent area and previous history has taught us that it is fairly well cocooned. What you tend to find is property owners are more likely to hold onto their investment and rent it out rather than being found in a situation where they have to sell.”
Richard said, “I don’t think we are going to see a crash or the interest rates back at 15%, there may be small increases, but if you take that into account when buying, then everything should be fine.”
At the end of the day property is still a sound investment and 2023 could be the year of opportunity. If you have any questions, please don’t hesitate to contact us.