The property market will remain buoyant in 2023, experiencing growth of between 5% and 8%, according to David Hannah, group chairman of Cornerstone Tax.
Hannah, who has 40 years’ experience in the housing market, believes predictions of crash are way off the mark, with “buyers still interested”.
Suggestions that the market will remain buoyant in 2023 stem from the continuing supply and demand issues the UK faces with those needing housing – whether they are looking to buy or rent – outnumbering the availability of stock, Hannah explained.
He believes low to mid single digit growth in 2023 will be led by foreign demand due to a decline in the price of sterling as the housing market became 10% cheaper. According to Hannah, this means that even if domestic activity continues to fall, the market will remain healthy. To back up his point, he cites figures from 2022 showing overseas investors now own around £90.7bn of property in England and Wales.
Hannah explained: “We have faced a massive set of instabilities. We’ve had two years of the pandemic, necessary pandemic spending, we’ve had the war in Ukraine, and that has increased inflation, which has led to a massive increase in interest rates.
“The popular narrative has been that there will be a crash of even 10% or 20%, but I believe the facts suggest otherwise. The chronic issue of supply and demand still exists in the market, meaning that even if the number of buyers falls slightly, there still aren’t enough properties out there for those that are looking.
“Not only that, but after the value of sterling plummeted towards the end last year, the UK market became much more attractive for foreign investors and this is still the case. That means that even if domestic demand wanes, the market will be kept buoyant by interest in the market from abroad.”
Hannah added that the UK property market “has tended to be more stable than any other global market in property”.
