Energy efficiency will become key considerations for buyers next year while those with cash will be preferred purchasers, Jackson-Stops has predicted.
The national estate agency brand’s outlook for next year predicts that mainstream house prices will either be flat or see a minor adjustment in localised markets of between 0% and a 4% decline depending on how the economy deals with a recession.
It predicts that waterside and coastal market are likely to be relatively immune from economic headwinds, especially on the South and East coast with close links back to London.
The overwhelming trend of lifestyle purchases is predicted to continue, driven by the swelling demographic of equity rich baby boomers looking to downsize, the agency said.
The middle market will get busy in the spring once buyers who are waiting to see what happens to mortgage rates get involved, the outlook suggests.
Jackson-Stops also highlighted that the prime country homes market in particular is not a ‘cappuccino market – all froth on top and funded by borrowing and instead cash purchases are much more commonplace than ever before
It suggests energy efficiency will become an even greater priority for buyers next year, with many house hunters opting for homes with electric charging points, upgraded insulation and ground source heat pumps, to offset rising running costs.
Homes with planning permission already in place will continue to command a premium, with the potential to save months of time by allowing buyers to do a ‘double jump’ purchase.
As the cost of moving home rises, 2023 will continue to see many buyers look to future-proof their next move and buy a property with the opportunity to extend or convert in order to cater for possible lifestyles changes in the future, Jackson-Stops said.
Nick Leeming, chairman of Jackson-Stops, said: “While the market will remain subdued until the end of 2022, we expect continued, if sometimes selective demand over 2023, with a return to more normal transaction volumes.
“Across our network we expect to see greater levels of supply enter the market in spring 2023 as long-term mortgage rates begin to level out, giving both buyers and sellers more clarity. House values next year will feel much more dependent on the slightest variables, from the perfect location to pristine finishes, without the backdrop of unprecedented demand to wipe away any such compromises.
“For a seller to command the best price, they must now be aware of more choice than we’ve seen in the past 18 months, making a purchasing decision all the more discerning and negotiations likely.”
He suggests that recent interest rate rises and changes to Stamp Duty thresholds could put first-time buyers and those looking to buy with smaller deposits on the backfoot in the short term, adding: “Yet, at the higher end of the market, where sellers will have more equity to buy with, broadly these buyers will remain insulated from mortgage rate rises and issues around affordability.
“Many lockdown legacies remain, in particular the race for space as flexible working is accepted as a permanent staple.”
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