Centrick’s Property Sales Predictions For 2023

Halloween has passed, Christmas is nigh and 2023 is just around the corner – but what are our property sales predictions for the next year?

In short, the 2023 market is looking remarkably buoyant based upon recent data and projections. The sales process is anticipated to become speedier, Stamp Duty cuts are sure to encourage future purchases, and the demand for space is due to become more prevalent. With that being said, here are Centrick’s five primary sales predictions for 2023:

The Sales Process Will Get Faster

We anticipate that the rate in which the sales market moves will become far quicker as the pandemic backlog of sales finally eases, allowing sales to complete and chains to be resolved more efficiently. This movement will lead to a faster-paced sales market with fewer hold-ups to new and existing sales. With 2022 seeing a significant delay in the conveyancing process, which has perturbed buyers and sellers alike, the importance of a speedy exchange has never been more evident. 2019 saw an average exchange period of 100 days, which many estate agencies, conveyancers and solicitors will be aiming to return to in 2023.

These processes are often affected by seasonality, with a significant downturn in activity often experienced over the festive period. However, going into January it is likely that a focus for many conveyancers and councils will be to reduce the exchange period from its current average 150-day turnaround.

Property Values May Dip, But Not By Much

With inflation and interest rates both rising, it’s anticipated that 2023 could see a slight dip in property values, but not by as much as you’d assume! Overall, the market is expected to remain buoyant for sellers despite the rather negative view many news and media outlets have had regarding the future of the property market. This comes as a result of a variety of factors in tandem: increasing fuel costs, hiking energy prices, and a cost-of-living crisis in 2022 have left many prospective purchasers with less to put towards their savings for a deposit, and with lower income available to contribute each month in mortgage repayments. However, with the government recently announcing the Energy Price Guarantee, it appears that the short-term worries many homeowners have regarding their energy expenditure may be easing. It is also important to note that these price dips are corrections rather than a worrying negative trend: the rising prices of the UK property market are far from sustainable, with house prices soaring by 11% each year despite the existing cost of living crisis.

Despite this, there is still high demand and low supply in the property market. January 2022 saw a 15% increase in property enquiries for Rightmove, but the number of listings continues to drop significantly. The Financial Times noted that the start of 2022 saw 350,980 properties on the market across the UK – although this certainly sounds like a large number, this is a dip of 36% since 2020. The suspected culprit of such a dip in supply is the pandemic, which has added pressure to an already tense discrepancy between supply and demand by halting new developments under construction and putting time pressure on existing chains. With such a lack of supply, property prices continue to rise, and homes are being snapped up faster than ever according to leading property portal, Rightmove – company Director Tim Bannister suggests that this imbalance is set to continue into 2023, demonstrating that next year truly will be a seller’s market.

Stamp Duty To Benefit First Time Buyers

September’s mini-budget was warmly welcomed by first-time buyers, who will now benefit from the return of Stamp Duty Land Tax (SDLT) exemptions for the foreseeable future. The changes will make it cheaper to get on the property ladder,  as first time buyers will no longer have to pay Stamp Duty on property purchases up to £425,000, helping them save thousands of pounds. Others will also be able to take advantage of reductions, with 0% SDLT for home movers and 3% SDLT for buy-to-let investors now payable up to £250,000 rather than £125,000, before moving into the higher tax bracket. Stamp Duty cuts greatly stimulated the market during the pandemic and will likely have the same impact again, especially for those looking to purchase their first home. An estimated 200,000 purchasers will not need to pay any Stamp Duty whatsoever thanks to the Chancellor’s cuts, allowing homebuyers to save over £11,000 on their property purchases. Centrick believe that this will produce a tangible boost for the sales market, which could balance buyer demand with the recent influx of rental demand as 2022’s tenants become 2023’s purchasers.

2023 Is The Year To Invest

Stamp Duty won’t just impact first time buyers, but will benefit investors too as they will be able to recoup money on their property purchases that could be used to save for their next investment property, or to offset potentially higher mortgage interest costs. Additionally, Savills’ 5 year forecast indicates that despite the economic conditions, property values will remain stable, and that the fearmongering regarding the bursting of the property bubble is unjustified. In fact, the property PLC predicts that the UK as a whole will experience compound growth of over 12%. This indicates that property remains a stable investment and a reliable asset class despite possible economic troubles such as inflation and the cost of living crisis – after all, property will always remain a necessity worth purchasing. Property can also provide a more stable investment vehicle than cash savings in times of inflation, as rental income and price growth will often provide a much larger return on investment over the long-term.

The Return of the Space Race

Don’t worry, we don’t mean launching a rocket to the moon, but rather preparing for the increasing popularity of gardens, balconies and communal areas in the property market! Research carried out this year has demonstrated the importance of square footage – specifically when it pertains to outdoor space – which can boost sales prices by a whopping £15,000, proving just how important these features are to buyers. This popularity comes as no surprise: with the UK experiencing more frequent heatwaves and still reeling from the restrictions of lockdown, the importance of the garden is soaring in popularity. This doesn’t necessarily bode badly for properties that do not come with gardens, as nearby parks and communal facilities in property developments have also become increasingly sought-after features in 2022 and are set to remain popular for 2023. For example, London’s iconic green communal squares can add value of up to 40% to nearby properties, with the vast majority of London’s homes lacking their own private gardens thanks to such high population density. In the same vein, roof terraces and balconies – which are becoming increasingly common features in new apartment blocks – can add an additional 14% to the value of your property, indicating just how desirable these features are to purchasers. So, if you’re considering renovating your home before putting it on the market, be sure to make the most of your outdoor space in order to optimise your sale value!

Indoor space counts, too: open-plan living is an increasingly popular means of making the most of your indoor space and creating a bright, airy environment. Research by St. Modwen Homes indicates that searches for ‘open-plan houses’ increased by 169%% from 2019-21, ‘open space home office’ increased by 167%, and most impressively searches for “open-plan kitchen living room floor plan” were up 6285% when compared with searches from 2019. By merging kitchens and dining areas by removing walls and changing layouts, or creating spaces within your existing floorplan that can be converted into open-plan office areas, buyers feel as if they are getting more for their money.

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One thing is for certain: our sales predictions for 2023 are looking very positive. For more information on how Centrick can help you make the most out of your property journey by securing you with the perfect home or by helping you sell your existing one, contact our team of sales experts using the form below: