The housing market is always a tricky one to predict and never more so than during extraordinary times such as the pandemic or cost of living crisis.
Three years ago the market looked very different – interest rates were stuck at an historic low, the daily commute was still a thing and swimming pools, games rooms and second homes were only for the very wealthy.
Fast forward 36 months and the property landscape has changed considerably. Second homes have become primary residences for many – fuelled by the desire to move permanently to a more rural or seaside location on the back of being able to work from home.
Additionally, properties with office space are becoming increasingly sought after as employees seek more flexible work patterns which includes working from home.
Not only that, buyers are increasingly looking for sustainability in the homes they are buying and a recent but growing trend has shown those properties with energy efficiency features built in are gaining popularity.
As for interest rates, from historic lows, they have risen significantly over the past year resulting in fixed rate mortgage deals of more than 4%, something the market has not seen for over a decade.
So, what does the future hold for the housing market the year ahead?
James Morton, Sheldon Bosley Knight’s head of residential sales and marketing believes there could be some significant developments this year.
He said: “One of the biggest drivers in 2023 will be the continuing effect of interest rate rises as it is speculated they will creep up again over the next 12 months.
“This will inevitably have an effect on mortgage rates but in our experience, these rises never seem to curb first time buyer demand.
“Although the market has slowed down from its pre-pandemic levels, and interest rates are back to more normal levels, there are areas such as Leamington, Warwick, Kenilworth, Kineton and Stratford which are enjoying an increase in popularity – for owner occupiers and landlords looking to invest.
“If this continues, prices will hold their own and may even show some small increase.
“Elsewhere we are seeing a continuing and growing trend towards sustainability. Since the pandemic, and more recently the energy crisis, we have seen a rise in the number of enquiries for homes which are sustainable or have eco-friendly features such as water butts, rainwater harvesting and solar panels. Even homes with electric car charging posts are becoming more sought after.
“Given the recent COP27 summit, the cost of living crisis, changes to EPC regulations for landlords and a greater emphasis and understanding on the effects of climate change, I believe this sector will continue to grow. It will be interesting to see whether the growth will include demand for ground or air source heat pumps as plans are in place to phase out gas boilers by 2025 in new build homes.
“And talking of new builds, there has been a concern about a lack of housing available for both home ownership and the buy to let market and given the government’s recent abandonment of its housing target, this will have implications for the market generally.
“As ever the teams at Sheldon Bosley Knight are always on hand to offer advice and support whether that is with sales or lettings. Please call one of our offices or pop in for a chat and see how we can get you moving in 2023.”