Property chiefs increasingly optimistic about 2023 market

There’s a slowly growing optimism amongst property industry figures that the 2023 housing market will be relatively pain-free and not seeing the crash that some feared.

Earlier this week Rightmove suggested that its moist recent asking price index for homes coming to the market did not show the significant fall that some had expected; likewise a Propertymark survey said that although there were fewer buyers around than last year they were I n a robust financial position despite the interest rate rises and inflation level.

Now Jonathan Rolande of the National Association of Property Buyers says that despite recent price drops there is not a serious risk of mass negative equity this year.

He says: “Prices would have to drop at least 15% from their peak to see a lot of people in negative equity. However, many will begin to see the price they paid is higher than the current value – an uncomfortable feeling, for sure, but only relevant if you're actually trying to sell up.

“So far at least, the property market is proving resilient and price reductions have been quite small – a few percent or so. This keeps many out of danger.

“There are lots and lots of factors as to why we should be seeing, and have seen already, drops in the housing market.

“After the Budget back in September, we saw interest rates and particularly long term borrowing rates absolutely rocket, they more or less doubled almost overnight, and 1,000 plus mortgage products were withdrawn from the market altogether.

“The market got an enormous seismic sort of shock at that point. Everyone reacted accordingly, sellers who had to sell had to start reducing prices in order to tempt purchasers and obviously some purchasers took advantage of the situation, rightly or wrongly, and thought, ‘this is my time to re-negotiate the price.

“Now though, I would say we came back after Christmas to quite a different market - much more buoyant than we would have expected, and we are hopeful that things may well start to improve.”

Rolande says there will be significant regulation variations but insists: “This isn't a crash at the moment. This is a slowdown and the areas that I would expect to see fall are really the kind of race-for-space areas, and then the holiday home areas.

“So the West Country and Wales, which saw a huge increase last year, about 18 per cent on average property price, as a lot of people from cities and towns nearby looked to get out into the countryside and get good value as it was then.

“So we would expect those to fall a little bit more but city centres Manchester, London, Leeds, those sorts of places where people are now returning to work. There is an appetite to buy property again.

“Those areas will be less affected than more rural and holiday and coastal areas.”