Positive outlook for the prime property market in 2023

Nicky Stevenson, MD of Fine & Country UK

Premium estate agency, Fine & Country recently wrapped up its Autumn Regional Tour, which started in Wales and went throughout the UK. Nicky Stevenson, MD of Fine & Country UK, says that the regional meetings are a great opportunity for the agents within the network to engage with each other and learn from each other’s successes. She adds that the regional meetings also provide a platform for agents to provide feedback about their local markets and their predictions for the year ahead.

“In each of the regions we conducted a survey asking agents to rate their business overview of 2022 from one to ten, as well as their outlook for 2023. Without exception, every region throughout the country had a more positive outlook for 2023. The average figure for this year’s business overview across the eight regional meetings was 7.4 out of ten, while the average outlook for next year was 8.3 out of ten. Overall, the network is more optimistic about 2023 and believes that their business will do better than it did this year, despite the predicted challenges that lie ahead,” says Stevenson.

She notes that 2022 has been an exceptionally busy year within the property market, and while 2023 is predicted to be more in line with pre-Covid levels, agents within Fine & Country network believe that there will be many opportunities in the year ahead, especially in the prime sector.

“There is no doubt among agents within the network that next year will be more challenging, but context is important when looking at the year ahead. The market is down, but comparing it with unprecedented periods will only amplify the perceived scale of decline. Reviewing historical seasonally adjusted transaction data from HMRC between 2015 and 2019, we can see that the annual average transaction numbers are 1,209,606. In 2020, transactions dropped to 1,038,580. The ‘Race for Space’ accelerated into 2021, with transactions reaching 1,480,870, a 42.5% increase on 2020 numbers. This is a considerable increase, which resulted in strained resource across the whole sector,” says Stevenson. “However, when contrasted with the five-year norm of 2015-2019, it is a 22.4% increase on the ‘normal’ levels of transactions, and not as high as the level of transactions seen between 2006 and 2007, which averaged 1,643,675 transactions per annum. So, context matters when it comes to reviewing the data.”

She notes that after such a contrast of years, as we ‘return to normal’ (2015-2019), it ‘feels’ like the decline is steep, especially as we enter a traditionally quieter time of year. “In a slower market, agents will need to increase their average fee to stand still or grow their market share. If the right principals and techniques are applied, the challenges in a tougher market will provide opportunity for good agents to grow their market share and beat out competitors with fewer resources. The best agents will shine in the tougher market, and brands with a strong value proposition and a focus on providing exceptional customer service will continue to push forward. The Fine & Country network believe they have the tools, customer service offering, and clear value proposition to be able to strengthen market share over 2023,” Stevenson comments.

She adds that agents believe that managing client’s expectations in 2023 will be essential, as will realistically pricing properties for the market. However, many are seeing good levels of stock coming to market and vendors who are more motivated to sell.

The prime property sector has remained robust throughout 2022, and it is believed to continue to outperform the greater market next year. “The upper quartile of the sector has been more cushioned from the economic headwind impacting the market, largely due to fewer buyers within the prime market being reliant on finance from banks to purchase a property. The prime market also experiences a higher number of overseas buyers, who have been taking advantage of the value of the sterling dropping in recent months. While the mini-budget may have slowed foreign investment, it is believed that the stability in recent weeks will have done much to curb concerns and reinstate confidence in the UK market,” Stevenson concludes.