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PROPERTY NEWS FLASH UPDATE

Posted in   Jan 27 , 2023

A prominent legal firm has given its view on the five key trends facing the private rental sector in 2023.

These come from Ian Errington, head of residential at Blacks Solicitors.

Mortgage rates: The much-derided September 2022 Truss/Kwarteng mini-budget sent mortgage lenders rushing to withdraw mortgage products and re-price them significantly higher. This led to predictions of Armageddon in the residential property market. Since October 2022 mortgage rates have started to drop, but are not yet back to the levels seen in early September, and it’s unlikely that we’ll see such rates again for the foreseeable future which is important to note for anyone considering investing in a buy-to-let property. Unless something unexpected pops up, it’s likely that UK mortgage rates will marginally trend down over the course of 2023.
Inflation: We’re expecting inflation to slow dramatically into spring 2023, as energy prices drop and base effects come into play. Base effects mean that the rapid increases in inflation that took place in spring and summer 2022 will nolonger be taken into account in calculating annual inflation statistics.

Interest rates: The “interest rate shock” has led to a rapid deceleration in activity in the housing market. Base rates have been increased rapidly by most major Central Banks to counter inflation. Andrew Bailey, the Governor of the Bank of England warned a number of weeks ago that markets were pricing in interest rates reaching levels higher than he expected. We therefore may reach a situation in late summer/early autumn 2023 where some Central Banks are U-turning and reducing interest rates.

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