Top 3 Market influencers to be aware of in 2023

11th January 2023

The UK property market is continually changing and evolving, with factors such as the economy, property cycles and government policy/ strategy changing the property landscape day by day. Observing the ever-changing demographic structure of the market, we have narrowed it down to the top three most prominent market influences to watch out for this coming year…

Cost of living Crisis

Its rare things are straight forward and simple in the property industry, but here is an obvious and direct cause of market turbulence.

With less money in the pocket of the average consumer, there is less money circulating in most markets, property included. That’s exactly what a recession is.

In light of increased pressures on the bank account of UK residents, the budget of the average home buyer is decreasing. whilst at the same time the number of properties coming to the market is likely to increase, as families look to release equity in their homes or as repossessions occur. This is doubled down by the sudden and steep rises in mortgage interest rates at the close of 2022…


Mortgage Interest Rates

In 2023 having a known and trusted mortgage broker on your side is going to be more valuable than ever. More so, of course, if you are looking to purchase or re-mortgage. It was well documented in the media about the rise in the costs of borrowing, particularly considering the now dubbed “disastrous” mini budget in September 2022. In the immediate aftermath, the cost of mortgage products was blown through the roof, or in many cases, products removed all together. A large contributing factor being the great “unknown” element of what would come next in a year of turmoil. Those with their finger on the pulse will have noticed, however, that the rates on offer as the year closed were creeping down once again. Though further increases to the Bank Of England’s base rate are expected in 2023, Lenders have now had the time and opportunity to take stock, and are cutting down on the fat initially added to rates as a security blanket and in initial panic. Conversely to what the mainstream media may suggest, personal circumstances dependant, you are likely to source a cheaper mortgage product now than two or three months ago.

If a known and quality mortgage broker is not currently in your address book, please speak to the Coapt sales team. We work with a number of 3rd party experts, including solicitors, tax and financial advisors, and importantly, a whole market access broker.

Buying Anxiety

Doom, gloom and more on the way. When in national recession, it can seem as though everything is going wrong, and that very well may be the case. This negative effect on all markets, including property, is then amplified by buying anxiety, or those trying to “beat the market”. With everyone and their dog forecasting property value drops in 2023, those in no need or rush to buy are biding their time. Why buy now if you are being told everything will be cheaper in 6 months?

One of the single strongest determining factors of value is the supply/demand equilibrium. So the more buyers who are trying to be shrewd and await the best deals, the more quickly this will come to fruition. Whilst a massive over simplification, this buying anxiety offers insight on both why values will drop in real terms, but also the light at the end of the tunnel afterwards…

It was after the initial covid-lock downs, and a reduction in buyer activity that values then boomed when the UK economy re-opened. There was pent up demand of buyers who had been sitting on their hands (thoroughly sanitised hands). This is exactly why you cannot ever really “beat the market”. As time goes on, and the number of waiting buyers accumulates, when the flag is dropped and it is deemed values are low enough to start pouncing, it will be buying galore, and thus the cycle starts again. The most important question of this equation though, is when this all will occur…

Whatever 2023 has in store for the housing market, Coapt is committed to generating growth in your property investment. Feel free to speak to our Senior Sales Consultant, Adam Coffin, to discuss how we can support you to achieve your maximum potential on your portfolio.