Writing in Property Industry Eye, Paul Smith, executive chairman of Spicerhaart comments on the forthcoming year.
The article can be read in full here, and in summary the retrospective and forward-looking analysis provides a comprehensive overview of the housing market in 2023 and the expectations for 2024. Here are some key takeaways from the provided information:
- Challenging Year in 2023:
- Transactions dropped by over 20%, influenced by the end of Help to Buy in March and global economic uncertainties.
- The Bank of England implemented 14 consecutive interest rate hikes, reaching 5.25% by the end of the year, impacting households, especially those unaccustomed to high-interest rates.
- Cautious Optimism for 2024:
- Mortgage rates are expected to come down, restoring confidence to the market.
- Anticipated uplift in transactions by 15%, supported by a potential fall in property prices, up to 5% in some areas.
- While a return to boom times may not be imminent, a gradual, steady recovery is predicted.
- Elections and Housing Market Impact:
- Housing concerns are expected to play a crucial role in the upcoming general election.
- Predictions suggest the rise of 40-year mortgages in exchange for lower deposits, potentially revolutionizing homeownership accessibility.
- Online Agencies’ Fate:
- Predictions indicate challenges for Purplebricks and Strike, with a forecast of them floundering. Purplebricks’ switch to a free model is mentioned as a factor in this assessment.
- Competition in Online Property Portals:
- CoStar’s acquisition of OnTheMarket is expected to challenge Rightmove’s dominance. CoStar’s CEO criticizes Rightmove for becoming complacent and prioritizing margin over innovation.
- Town Centre Branch Closures:
- Anticipation of more town centre estate agency branches closing due to the ongoing digital revolution and the rise of AI. Agencies may relocate teams to regional hubs or expand remote work options.
- Need for Better Training:
- Attracting high-quality talent remains a challenge in 2024, emphasizing the importance of elevating standards and ensuring well-trained and ethical professionals enter the industry.
- Calls for a structured licensing program and a trade body to train people for the industry.
- Notable Industry Players to Watch:
- Foxtons, under new MD Guy Gittins, is highlighted for its regained position in London, focusing on local expertise, digital transformation, innovation, and customer-centric approaches.
- IAD, a European agency entering the UK market, is mentioned, with a question about its ambition to become the dominant estate agency across Britain.
- Overall Outlook:
- Despite the challenges of 2023, the stage is set for a potentially positive and growth-oriented 2024.
- Hopes for recovery, resilience, and renewed optimism in the housing market.
The analysis provides insights into various aspects of the housing market, from economic factors to industry trends and predictions for key players.
