Will 2023 be a bad year for Estate Agents- The UK Property Market Shifts Toward Buyers

The UK property market is rapidly tilting in favour of buyers, forcing leading property sellers to choose their estate agents more prudently. Market analysts predict that this shift could spell bad news for estate agencies operating online. While the last quarter of 2022 was relatively stable for many property agencies, mortgage approvals are crashing, and there are fewer buyers entering the market. In November 2022, mortgage approvals were significantly below their 10-year average, signalling that the market is now entering a buyer's cycle. This means sellers will need to be more selective when choosing how to sell their property, with online agents expected to face more challenges.

Declining Market Activity in Late 2022

According to TwentyCi, the UK housing market delivered 289,635 new instructions in Q4 2022. This represents an 8% year-on-year increase but is down 28% compared to the third quarter of 2022. The significant decline can be attributed to a seasonal drop. Despite the quarter-on-quarter decrease, the housing supply remains relatively stable. The market experienced a slight 1% drop compared to pre-pandemic figures in Q4 2019, which suggests that the housing supply remains consistent.

November's Data Signals a Shift in the Market

The concerning data from November 2022 revealed mortgage approvals were much lower than the 10-year average, a clear indication that the market is transitioning to a buyer's market. This shift in market dynamics is expected to pose significant challenges for online estate agents in 2023, as they may struggle to adapt to the changing conditions.

Opportunities for Home Buyers in 2023

For homebuyers, 2023 could present an ideal opportunity to purchase property. Given the cyclical nature of the UK housing market, buyers must take a long-term view. Although indicators suggest prices will drop this year, there is no guarantee that they will not increase, as has happened in previous cycles. This uncertainty highlights the potential benefits for buyers willing to navigate the changing market.

Available Schemes for Homebuyers

Although the Help to buy equity loan facility is no longer available, prospective homebuyers can still take advantage of alternative schemes like shared ownership and First Homes to secure affordable rates on property purchases. These programs provide support to help buyers enter the housing market in a time of rising costs.

Ringley’s Outlook for 2023

At Ringley, we predict a small drop in inflation, continued rental growth, and downward pressure on house prices throughout 2023. While the market is shifting, these factors will likely impact estate agents and the broader property market as the year progresses.