Market Comment (January 2023)
January is often a complex month. Many people like to look forward and are genuinely optimistic that this might be the year things work out well for them. Of course, the weather is miserable, post-Christmas blues often mean people worry about £s and lbs, and there isn’t a lot of sunlight to cheer us up.
However, it appears as though the housing market, and the specialists who operate in it, are leaning to the side of optimism as we make our way into the year.
Falling mortgage payments boost confidence in market
Last year was slightly tumultuous, to say the least, politically and financially, so there were many ups and downs. In August of 2022, which was prior to the mini-budget, the average monthly mortgage repayment stood at £1,113. By October, the impact of the mini-budget saw the average monthly mortgage payment rise by 28.5%, reaching £1,430 each month.
According to analysis conducted by Octane Capital, in January 2023, this figure is down to £1,200 per month. It’s not quite as low as it was back in August of last year, but it is going in the right direction as far as homeowners and prospective buyers see it.
Jonathan Samuels, CEO of Octane Capital, commented: "The disastrous mini-budget, and the Trussenomics it was based upon, resulted in a great deal of market uncertainty which, in turn, led to reduced levels of buyer activity and cooling house prices during the closing stages of 2022. However, those buyers who sat tight and weathered the instability have now been rewarded with a swift drop in the cost of borrowing and this has helped to steady the ship already this year. As this confidence builds further, we expect rates to keep reducing and this will help rejuvenate the market as buyers return to continue their quest of homeownership.”
Heightened activity from buyers creates optimism
Studies by Credas Technologies suggest that the level of Anti-Money Laundering (AML) activity in the market, a sign of checks made on prospective property buyers, has risen sharply in recent weeks. The January figure is likely to be more than 45% higher than the December of 2022 figure, and it should be up more than 21% compared to the January 2022 level.
Tim Barnett, CEO of Credas Technologies, said: “We saw a heightened level of market turbulence following last September’s mini-budget which caused an immediate decline in property market activity. At which point, the property sector naysayers re-emerged to once again make predictions of doom and gloom, having been previously proved wrong when doing so at the start of 2022.
However, our ahead-of-the-curve insight suggests that the property sector has bounced back at an impressive rate when compared to the decline seen during the final quarter of 2022”.
Tim Barnett concluded by saying; “At the same time, the current level of market activity has also exceeded that of January 2022 by quite some margin, suggesting that any momentary market wobble could well be in the rear-view mirror. Whilst nobody has a crystal ball, what our data does indicate is that those who have made the most dire of predictions for the housing market in Q1 may well prove, for the second time in a year, to be wildly pessimistic. Early indications are that the outlook is much healthier than many have so confidently predicted.”
Positivity but caution is still required
While these are positive signs, it would be wrong to say everyone is delighted with the housing market at the start of 2023.
A GetAgent study which spoke with 532 UK estate agents indicates:
• 57% say they are less busy than they were this time in 2022, while 18% say they are busier
• 51% of estate agents say they have a lower amount of for sale stock compared to 2022
• 45% of agents say they have seen a fall in new enquiries from people looking to sell property
Mal McCallion, COO of GetAgent.co.uk, commented: “It’s far too early to tell just how the market is going to perform this year but an initial gauge of market health tells us that we seem to have picked up where we left on in 2022 with respect to a heightened degree of market volatility. Many agents seem to be experiencing a drop in buyer and seller activity, with those buyers who are making an offer doing so at below asking price straight off the bat. At the same time, we’re seeing a higher level of transactions falling through and a higher propensity for down valuations as many surveyors anticipate a reduction in house prices.”
Mal McCallion concluded by saying; “It certainly presents a challenge for the nation’s estate agents who will have to prove they are the very best in their respective market in order to entice sellers onto the books.”
These are unique and challenging times, which is why you need assistance from experts and specialists. At Trading Places, we know the local market in Leytonstone, and we understand the national market. If you need any help, guidance or professional support, please contact us today.
If you would like to learn more about Leytonstone, what the area has to offer, and how to achieve your goals in the local property market, we can help. To arrange an appointment, call us on 020 8558 1147 or send us an email at info@tradingplacesproperty.com
You will find Trading Places Estate and Letting Agents at 46 Church Lane, Leytonstone, London, E11 1HE; and we look forward to assisting you.
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