What Property Investors Can Expect from the Market in 2023

By Joseph Gurvits, founder and managing director of Y&Y Management

Many have felt the past few months in the UK to be tumultuous. With political strife and the economic volatility casting a shadow, some investors may be choosing to rethink their strategies. However, now the country approaches what looks to be a more stable period of governance with a leader widely regarded to be fiscally conservative, it is hoped that the economy will steady, and investment levels will increase again.

For current and new investors, one thing is for sure. Property continues to be widely regarded as one of the safest and dependable avenues of investment. Now as we approach 2023, many investors will be looking for opportunities in the new year. New research from Alliance Fund indicates that even after adjusting for inflation, the average new-build property has increased by 22.1% in the last year, up 62.4% in the last decade, suggesting the market continues to be strong.

Investors will need to be aware of the turbulent UK market though, especially given the fact we have seen prices fluctuate in recent months. As we move into the new year, the most crucial element to investing will continue to be ensuring you have a wealth of knowledge and research behind you. Those looking at the buy-to-let market specifically, will see that the rental market has experienced a particular boom in the last few months, with rental properties within major hubs being particularly competitive. Rising demand for homes, combined with falling supply, has pushed prices higher than before the pandemic. So, although house prices have spiked, investors can still create a good return on their buy-to-let properties. Earlier this month, Rightmove reported that the average monthly rent for a property outside London is £1,162, up by 3% in the past three months, while in London it is £2,343 per month, a rise of 16.1%.

The changes to the government cabinet will undoubtedly impact the housing and investment sector. It is felt by many within the property sector that levelling up must continue in order to help bring in investors to bolster the economy. Liz Truss laid out her plan for pushing forward Investment Zones, that would aim to simplify and streamline the planning system, which for years has been notoriously awkward and painstakingly slow. Investment Zones would aim to remove these requirements, focusing instead on a stripped bare version of essential infrastructure needs. Now with Rishi leading government instead, many investors are unsure if they are so high up on the new government’s agenda.

For those already in the game, now may be a time when they begin looking to diversify their portfolios. It is widely acknowledged that placing your investments across a range of sectors is sensible, so to mitigate any downsides. With time, the economy will fully bounce-back, but while we await full stability, preparing for peaks and troughs is advisable. As with the first time investor, however, now is a time for careful consideration with full acknowledgement of any potential risks. Despite the trying circumstances, property investment remains an exciting opportunity, with many upsides.