Last Updated on: 22nd November 2023, 06:57 am
Two thirds (64%) of property entrepreneurs have a positive market outlook for the year ahead, new research from Ashman Bank has found. As further proof of a sense of optimism amongst market participants, 81% of respondents believe property sector funding will increase in 2023, and two thirds (65%) anticipate the mortgage market will become more stable with rates settling as early as next year.
Despite a year marked by economic and political volatility, with 61% of respondents agreeing that market uncertainty is currently at an all-time high, the study also revealed that four-in-five feel confident their business will survive another year. In fact, 64% anticipate that their business will grow in 2023.
Ashman Bank, which was awarded its UK banking licence (Authorised with Restrictions or ‘AwR’) in June of 2022, commissioned a survey of over 1,000 UK decision makers in the property development industry to get an understanding of the defining challenges they faced in 2022 and their outlook for the year ahead. The findings reveal an encouraging sense of positivity for the future of the real estate market, despite a backdrop of economic uncertainty.
When asked about the greatest challenges posed to their business in 2022, three-in-ten (29%) pointed to supply chain delays. On a related note, the rising costs of suppliers closely followed, at 27%, with the same proportion highlighting tax increases. A fifth chose interest hikes (22%), which is unsurprising given recent base rate rises taking rates to their highest in 14 years.
Looking ahead to 2023 and the commercial real estate sector see a similar picture, with supply chain delays coming out on top, chosen by a one-in-four respondents (26%). Tax increases and rising cost of suppliers ranked next, both at 22% respectively, and 18% chose political uncertainty and the same proportion said the cost-of-living crisis. 16% say further interest hikes are a key source of worry.
Caroline Luxmore, Chief Commercial Officer at Ashman Bank, said: “Landlords and developers currently face great challenges, from supply chain and labour issues to political uncertainty and of course the cost-of-living crisis. Despite this, property SMEs are surprisingly optimistic about 2023 and the opportunities it presents to their businesses. The research highlights the expectation for more property sector funding next year. It is important that access to finance is made as simple and transparent as possible to ensure that hope isn’t dashed.
“The findings reflect how property SMEs are determined to ensure that when one door closes, another will open. Whether that’s finding new opportunity in the buy-to-let market or seeking more sustainable solutions that will give them longer terms gains. It is the responsibility of financial institutions to support these businesses, offering solutions that meet their needs, to ensure the industry can weather the storm and come out on top in 2023.”