What Property Investors Can Expect in 2023 – Research by The Alliance Fund

21 January 2023 - 10:01 am

A lot has been said about the future of property values, following years of COVID-fuelled price booms, the economic uncertainty that much of the world now faces has led many commentators to suggest that property no longer provides the stable investment that it has for so long.

However, in a world of economic uncertainty, real estate continues to be one of the most reliable investment assets money can buy, according to new market analysis by Alliance Fund and maintains its position as a valuable and reliable money maker.

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 and 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.

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 an amazing 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%.

According to the Chief Executive of Alliance Fund, Iain Crawford:

“The property market ebbs and flows and is well known to be cyclical”. 

“Yes, we’ve seen turmoil in the interest rate markets since the flawed Kwasi Kwarteng Budget but property owners have enjoyed a rather sweet time of late, even if there is an adjustment of 5% to 10% in prices, those owners are still well ahead of the game on accrued value”. 

“Property is far more reliable over the medium to long-term than the temporary hikes of energy and crops”.

“Indeed, property has historically been one of the safer and more consistent investment options. It is relatively accessible due to a range of buying options, while segments like residential purchases, funds, buy-to-let, and even commercial spaces offer something for everyone.”

“2023 will be a leaner property market, that is undisputed. But talk of price crashes and meltdowns are wide of the mark given that medium term mortgage rates are already dropping significantly”.