Mortgage lender optimistic about next 12 months
Nationwide have published their annual house price review and forecast, predicting that a “relatively soft landing” is still achievable in 2023.
Reflecting on a turbulent year in which the first three quarters were “remarkably resilient” for the industry, Robert Gardner, Chief Economist, noted that the last quarter saw the “worst run since 2008”.
And, looking to the year ahead, Gardner noted that it will be “hard for the market to regain much momentum with economic headwinds set to strengthen”.
The risks are skewed to the downside, but there is still a good chance that we can achieve a relatively soft landing next year with activity stabilising modestly below pre-pandemic levels and house prices edging lower, perhaps by around 5%.
robert gardner, chief economist, nationwide
A poll on Housing View’s Twitter feed reveals that many are slightly more optimistic, but in agreement that the house price rises seen over the past two years are unlikely to continue.
Meanwhile, Zoopla have revealed that house prices grew by 7.2% over 2022, but the slowdown in the market is “gaining momentum”.
Reporting an annual increase of around £17,500 for the average UK property, the property website forecasts quarterly price falls in the first half of 2023, bringing annual growth into negative territory by mid-year.
Zoopla also noted sellers accepting larger discounts to achieve sales, with the gap growing to 4% in November from 0% in October, and expect discounts to widen further in 2023.
Pleasingly, HMRC statistics have shown that the provisional non-seasonally adjusted estimate of UK residential transactions in November 2022 is 114,200, 12% higher than in November 2021 and 4% higher than October 2022.
However, the report notes that recent increases in mortgage rates and subsequent impacts on market rates have not yet had an impact on these statistics.
Merchant volume sales fall as plasterboard cost increases cause anger
The latest Builders Merchant Building Index (BMBI) report has shown that sales volumes were down 5.6% in October 2022 when compared to the same period last year.
However, due to prices increasing, sales revenues were 7.5% higher over the same period.
It’s hard to think of a time when the industry has had to face so many shocks to the system in such a short time.
mike rigby, ceo, mra research
It would be good to return to some sense of normality in 2023, but I wouldn’t bet on it.
Meanwhile, plans for another increase in plasterboard prices from January have caused frustration amongst contractors.
With increases of more than 15% set to hit, Construction Enquirer reports that contractors have been left “angry and bemused” by the latest price hike.
“The big players dominate the UK market,” says one contractor, “and this smacks of profiteering at a time when the industry and the wider economy simply cannot afford it.”
Housing View 