Yet I cannot resist - here are my 10 predictions for what’s coming up.
1. Base Rate will peak … below current expectations: The Office for Budget Responsibility forecasts base rate to rise from today’s 3.0 per cent to 5.0 per cent by late 2023. I don’t deny that this is wishful thinking but there are already signs of - well, not stability, but something less drastic than forecasts suggest. For example five-year mortgage rates have dropped to below 6.0 per cent from the late October rate of just above 6.5. And Moneyfacts, the independent mortgage market monitor, says two year mortgage rates are also down slightly from the worst levels. Of course things will get worse before they get better - but I’m suggesting the worst will not be as bad as feared.
2. Repossessions - No repeat of the 1990s: High numbers of repossessions after previous downturns backfired on mortgage firms who introduced strict lending conditions that simply reduced their business volumes. That won’t happen again. On top of that, even the most pessimistic forecasts suggest two years of recession and then a relatively stable return to past activities: sensible lenders will reorganise and not repossess. Expect to see customised and extended lending periods for home owners who hit trouble and, in some cases, repayment holidays as seen during the first 18 months of the pandemic.
3. Planning Procrastination: Michael Gove was the housing secretary who led the government retreat from radical reform in 2021’s planning bill following widespread opposition from Tory MPs. He was also, of course, a supporter of Brexit which appears partly (perhaps more than partly) behind the labour shortage in the construction industry. So what an inspired choice by Rishi Sunak to bring back Gove in November to lead the next planning backtrack. Yet more cave-ins, following the housing target face, will likely feature in 2023 as Tory backbench rebellions continue to determine policy. Expect to see less house building in 2023 than in 2022.
4. Rental Reform Bill: The long-awaited Rental Reform Bill will be introduced into Parliament with the abolition of Section 21 fast-tracked in a bid to woo young tenants to vote Tory (some chance). The other elements will be subject to consultation and declination with a chance some measures will not become law until - you’ve guessed it - after the next General Election. Labour will struggle to find anything to seriously quibble with until it reveals its dramatic new policy which will be …
5. Labour will call for a UK-wide Rent Freeze: There are positive signs Labour does not event want this policy which, history shows us, leads to disinvestment by private landlords and worsening housing standards. But with Michael Gove so shamelessly stealing Labour’s clothes on this issue, the Opposition has to become even more pro-tenant and anti-landlord.
6. Online market share to remain roughly the same, despite recession: If there were ever a time for low-cost online agencies to win a bigger market share, it would surely be during a recession. Yet so far, there’s no sign. And with Purplebricks tipped by some to announce a big hike in fees soon, don’t expect any digital inroads into the dominance of old-school agencies.
7. More largely-ineffective politically-expedient slogans about Airbnbs and holiday homes: Love ‘em or hate ‘em, short lets and/or holiday homes are here to stay so do you (a) scapegoat them as the cause of Britain’s housing shortage, as has happened lately, or (b) confess that the real problem is too few homes being built in the right place. With a government in need of a political backbone (just the one would be nice, over any issue) expect to see more scapegoating and too little house building.
8. There will be no tangible progress on agent regulation: The Regulation of Property Agents working party reported in the summer of 2019 and whilst the government’s procrastination is frustrating to many in the industry, Gove and Co will know that it’s not caught the imagination of the general public. While emotive and often poorly-informed stories about the private rental sector abound in the mainstream media, there’s barely a mention of the chaotic, slow and soul-destroying house buying process. For a government in its final full year, agent regulation will not be a priority.
9. New chief executive for Purplebricks: Bosses of this agency come and go quicker than British Prime Ministers, and often for the same reason - they lavishly promise to turn things around, yet invariably do not, although they tend to cause considerable destruction on the way.
10. Sadly, there will be job losses: Unemployment is horrible whatever its cause. Suppliers are already shedding and some small independent agencies are, too, often dropping younger agents who think listing on Rightmove is ‘job done’ and who have no real experience of hitting the phones and chasing potential buyers. Whether or not it leaves the industry leaner and fitter afterwards, joblessness is a grim experience for those concerned and their families. Our thoughts should be with them this Christmas time: there may be more such victims throughout 2023, which makes this a particularly sober holiday season.
Thank you for reading my column each fortnight this year; good luck to everyone for 2023, and have a peaceful break until we meet again in early January.
*Editor of Letting Agent Today and Landlord Today, Graham can be found tweeting about all things property at @PropertyJourn
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Your 5. above - there is already a great deal of disinvestment in the sector, as the amount of Anti-Landlord legislation piled onto Landlords for the last 10 years has already had a detrimental effect - leading to fewer properties available.
Rent freezes (if they do come in somehow) as well as mortgages going through the roof will speed up that process.
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