An overview of the property market in 2023 from Sean Hooker
The property market in 2023 witnessed the aftermath of the turbulent end to 2022 and, as predicted, has been in a period of transition and will remain so for the near future.
As Lord Palmer has suggested, the main driver of all this is the economy and an era of high inflation and high interest rates, which has very much shaped the market. It is also clear that the volatility of the economy made planning and preparing difficult for agents last year and some agents unfortunately did not survive. We saw supply in the sector fall significantly, with sales drying up and buyers becoming more circumspect and cagier as the cost of borrowing shot up. House prices did not dip too much as some predicted, but this was down to the sluggish market, and properties that were put up for sale took longer to sell as they struggled to meet their asking price.
The effect of the economic situation on the rental market meant that supply went down, demand went through the roof and rents hit record highs. This situation cannot continue indefinitely but certainly will shape the market for a while to come.
The leasehold sector is still coming to grips with the building safety legislation and, after what seemed like an age, the first draft of the promised Leasehold and Freehold Reform Bill 2023-24 came out in late 2023.
Although 2023 did feel like a year of beginnings, nothing was concluded. This was certainly the case for the Renters (Reform) Bill, which was laid before Parliament in May, but was still winding its way through the process at the end of the year.
Legislation does take a long time to reach the statute books, but with a general election due imminently, there needs to be a flurry of activity if the changes are to be delivered.
I am acutely aware that agents, as businesses, just want to know what the landscape will look like so they can plan and implement the necessary changes. Although I cannot give you any certainty or reassurances of when these will come in, for now and probably a good eighteen months, things will roughly remain the same.
We at the Property Redress Scheme continue to engage with the Government on a range of their proposals and we are preparing and working closely with civil servants and industry leaders to help prepare the path for a number of the reforms.
Landlord redress remains a core area that needs to be addressed, as will be redress for leaseholders from their freeholders. These changes will complete the circle, of which agent redress has been the significant start, and means the prospect of a holistic dispute resolution regime is now a realistic aim. I also anticipate property condition to be an area on which focus will increasingly be directed. The tragic case of baby Awaab was a turning point and the measures on tackling damp and mould that are now being rolled out in the social sector will be rapidly extended to the private market, so be prepared.
Property description will be paramount and much work has been done by the influential Home Buying and Selling Group to ensure upfront information is accurate and up to date and the introduction of the voluntary Buyers and Sellers Property Information form back in 2020 and its ongoing evolution to access open data to ensure a single source of truth, will greatly assist estate agents with the provision of the essential details needed and reassure them that they are doing the right things. For the rental market, property condition is increasingly the key information needed and the role of inventory clerks and the property condition schedules they produce, will be central to helping agents providing the vital information needed to ensure they are compliant and their landlords and tenants understand the importance of this. Property managers will need to cooperate with both leaseholders wishing to sell their properties and for those wanting to rent out leasehold properties. Building and fire safety information is paramount and therefore will need to be provided in a timely and cost-effective way so agents can fulfil their obligations.
A significant focus on material information will also be a priority for this year and the groundwork for this was done in 2023 and before.
Over the coming years, the sector will need to get up to speed with delivering material information, especially in the digital environment, with the major property portals leading the way in facilitating the changes.
You can find out more about what you and your landlord customers think are the important factors that will impact the future of the sector by reading the results of our recent major survey, which we feature in this report.
The scheme continues to develop and push forward and as you go through the report, you will see from the statistics that we continue to grow, innovate and improve.
We reached several milestones in 2023, topping 19,000 individual members and branches, and dealing with 20% more complaints.
We are steadily increasing our membership of sales agents and leasehold property managers. There is now genuine choice in the market and we are the go-to scheme for small and medium-sized agents, offering a cost-effective and easy to join route into meeting their compliance obligations. We have also attracted some of the larger national and regional agents with multiple branches and widespread high street presence. The increasing recognition of our purple logo provides the consumer with reassurance, signalling that we are one of the key pillars of compliance in an increasingly professional and trusted industry.
Although the sector remains largely unregulated, alongside client money protection and deposit protection it is a considerable way further down the path of professionalism than it was a decade ago.
We are pleased and proud that, in 2023, we cut the average time we deal with complaints and increased our early resolution figures, which reflects the work we do to help achieve effective voluntary, private resolution between parties.
We have expanded our services to include more property sourcing agents and spent time developing a partnership with a growing voluntary organisation for this sector, the National Association of Property Sourcing Agents, which now means their members have interaction across the whole redress sector, regardless of which scheme they choose. We also saw the first Property Educators Summit, which brought together the inaugural members of the Property Investors Bureau. This was founded to provide a compliance framework for firms providing property courses, which are for many property investors and agencies their first introduction to the sector. The Property Redress Scheme provides redress for their members, and they continue to grow and expand. We undertook a major revamp of our governance structure especially with regards to our long serving Advisory Council, expanding it to two panels that provide an advisory service to me, the Head of Redress - an ‘Advisory panel’ and a ‘Members panel’, to engage and consult with our growing membership. The revamp has revitalised, democratised and diversified the representation and they will hold the scheme to account, help improve our service and increase engagement with the members, the wider sector and users of the service.
They have already assisted the scheme in the production of new guides to best practice in particular parts of the sector such as property sourcing, which was launched in 2023. You can find out more about the panels and their members later in the report.
We are also proud that we have helped to expose some of the bad practices and less scrupulous operators in the sector, while helping others to improve what they do, learn from their mistakes, and put things right when they have gone wrong.
