So here we are again - one of the strangest years so far, certainly from my perspective, is drawing to a close. Eyes turn towards 2023 and what will be needed to survive and thrive through the slings and arrows of outrageous fortune that will no doubt be aimed somewhere towards the private rental sector, and the wider property sector as a whole.

We’ve had news, from everywhere except the ONS, that prices are down. We’ve hit the peak of the recent cycle - apparently. This is probably a positive thing, as silly as that might sound - because a rise of c. 25% in 2.5 years in a non-boom economy is the stuff that dreams are made of; but those dreams normally end in tatters. Boom and bust favours nearly no-one. What the overall market needs is stability in the cost and availability of credit - something we’ve had, and taken advantage of, for a decade or more - and a healthy level of demand from renters and homeowners, supported by a healthy and sustainable level of growth in wages.

Wage rises at the moment, instead, are reflective of a tight labour market and are chasing inflation, rather than matching it; they aren’t matching energy inflation, rental inflation, food inflation, or much at all, in fact, on examination. The UK property market in terms of final figures this year looks like it will indeed end at about 3-4% up for 2022, which simply will not tell the true tale of the tape, where double digit rises have calmed right down with this correction inspired by the overwhelming economic incompetence of the Truss/Kwarteng administration.

It’s fair to say that those who are experienced will have eyed the events of the previous few years with caution, I’m sure - we went from predictions of 40%+ drops in prices (I don’t even think a nuclear attack would cause that) to an actual rise of 25%+, and now we find ourselves at the most bearish end facing predictions of 20%+ drops in price again. This is good copy; great for headlines - but fantasy territory. Short of another major shock - which we cannot rule out, of course - the likely path is more a correction of 5-7% in my view, with some allowance either side for regions, timing, type of stock, etc - and we are most likely around 40-50% of the way into that correction by the time we’ve hit publication this month.

So - a flat, or slightly falling, market for 2023. Recession guaranteed - mathematically, yes. Recession with rates still rising, and lots of pressure on wages due to industrial action and fatigue, particularly in the public sector, on the back of 5+ years of austerity. An average base rate prediction next year of 3.75-4.00%, in my book (this does not guarantee rates at say 6-6.5%, because they are more predicated on bond yields, but it would be a surprise to see the 5-year bonds and swaps more than 1% below base when base finally has caught up enough to ensure conquering inflation). This all filters through to likely mortgage rates next year, for investors, on 5-year products, from 4.75% to 5.75%, with another 1.0-1.5% to be added on for specialist lenders.