“The final transaction data for 2022 echoed the trend we saw throughout the last quarter of the year, reflecting a cooling housing market, weighing heavy under the cost of living crisis. The recessionary period we are now in the midst of, alongside the higher borrowing rates on offer compared to this time last year, has certainly impacted people’s appetite to move. This can be seen in the data, which saw a 3% decrease in transaction volumes in December. Although transaction levels tend to seasonally decline at this time of year, it is a sensible assumption to expect to see this trajectory continue in 2023 as we settle into a sustained period of financial difficulty.
“In the commercial real estate sector, we know that with high inflation rates, rising cost of finance and higher exit yields, alongside trends such as falling office-based employment, will likely cause transaction volumes to remain lower than previous years. However, this may be offset by new environmental regulation adding unexpected momentum to the office sector. Set out by the Government to encourage energy efficiency in office buildings, this may force the need for companies to develop or refurbish existing spaces,or move to more efficient buildings altogether. This will continue to spark some movement in the sector, despite low demand for commercial property more generally.
“Looking ahead, for homebuyers who are still looking to move, they are now part of a vital group keeping the residential market moving. We know over a third of property sales fell through last year, peaking at over 52% of all transactions in November, a number that could be set to increase due to the upcoming HM Land Registry strike. Due to occur on 1 February, following disputes regarding pay, pensions, jobs, and redundancy terms, the strike action has the potential to even further delay transactions and exacerbate problems with homebuying being felt across the country. It is vital that we help the industry stay on its feet using technology as the catalyst for change. We calculated that the average legal firm stands to save 115 hours a month when making laborious tasks automated, while the sector as a whole stands to save over eight million hours each year through end-to-end digitisation. This incredible time-saving could be just the antidote struggling law firms need when facing ever-complex caseloads in what will be another tumultuous time for the property market in the coming months.”