"Hope was starting to appear from unusual places"
Last year was a challenging one for the property industry, so it was understandable that entering 2023 was met with some trepidation.
Property sales fell and enquiry numbers reduced towards the latter part of 2022, and the prevailing outlook for the year was as negative as “if you think it’s bad now, just wait for 2023.”
But is there no hope to turn things around and make 2023 a better year for the property industry? Lee Johnson (pictured), director at independent mortgage brokerage Willow Private Finance, sees some glimmer of hope.
“Many in the industry were left shaking after the 2022 visit from the four horsemen of the property market apocalypse: nine interest rate rises, a catastrophic fiscal policy in the shape of the mini budget, the collapsing of the value of the pound, and lenders removing lending products while simultaneously raising interest rates by percentage increases the likes of which many had not seen for over a decade,” Johnson said.
“Much of this occurred in the final quarter of 2022, but the world was far from rosy before this. Post-COVID, lenders and supporting specialists found themselves understaffed and under skilled, decreasing the service given to unacceptable levels, leaving many consumers and brokers frustrated and angry.
“Mortgage brokers were beaten and left downtrodden well before the September mini budget debacle.”
Johnson, however, pointed out that this did not mean that 2023 would be as bad or worse than the previous year, as a lot of experts had earlier forecasted.
“Not all things are as predictable as some may have us believe,” he said. “The Christmas period provided respite, a pause from the negative outlook. At the same time, hope was starting to shoot up from unusual places.”
Johnson noted that lenders, in part due to their decoupling from the overnight index swap rate, began looking inwardly for their rate decisions and started to become more creative with both their interest rates and products, providing new updates on rate reductions on a weekly basis.
“House prices also didn’t collapse in the way people had expected, and the pound returned to its mid-year level,” he added. “The lack of property enquiries was felt across the industry, certainly in November and December, but this was not a new normal, this was a brief hiatus while the world caught its breath.
“Fast forward to present day: property prices are up, according to a recent report by Rightmove and enquiries at estate agents are up 55%,” Johnson said, adding that from their perspective, brokers are actually experiencing one of the busiest periods on record.
He also shared that during a recent discussion with one of his team members, he was told that the total number of calls – outbound, inbound, and missed – for one particular week exceeded 420, which was a lot.
“The industry and the market are experiencing an unblocking of the bottle neck,” Johnson remarked. “A bottle neck that was filled with uncertainty, but has been removed by a buoyant seller market underpinned by extremely hungry and competitive lenders.
“2023 will be a very interesting year and there are still extremes on both sides of the isle regarding the strength of the economy, but lender competition and innovation can only help when it comes to navigating the next few months.”
Do you think 2023 will be a better year for the property industry? Share your thoughts with us by leaving a comment in the discussion box at the bottom of the page.
