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What to expect from the 2023 UK property market

Possible house price falls seemed to dominate the news agenda at the end of 2022.

Now we’re in 2023, little has changed, and there’s little doubt that we’re entering a period of change in the property market.

If you’re pondering a move this year, you might be feeling a bit overwhelmed with uncertainty.

So, we’ve put together a list of the key things you can do to mitigate that uncertainty if you’re planning to buy or sell in 2023.

Will house prices drop in 2023?

To answer this question, we’ll first ask you to look back over the past two years.

Since the summer of 2020, when the government introduced a stamp duty holiday, and the middle of 2022, property prices in the UK grew by an average of 5.9%.

Next, we can look at predictions from leading commentators on how prices may fare in 2023:

  • Rightmove predicts a 2% drop in prices
  • Zoopla predicts prices will decrease by ‘up to 5%
  • Halifax suggests prices will fall by 8%

Those predictions have been softened compared with those that emerged after the government’s mini-Budget, which caused turmoil in the financial markets alongside continued rising inflation.

And even if those predictions were to come true, most property prices would remain above their pre-Covid levels due to accelerated growth over the past two years.

What will happen to interest rates?

With interest rates rising so quickly during 2022, it’s this issue that has caused many buyers to ‘wait and see’ before committing to a property purchase.

Rates rose from historic lows of 0.1% to 3.5% in just 12 months from December 2021 to December 2022.

And combined with the mini-Budget, this led to many mortgage lenders dramatically increasing their own rates.

Those rates began to fall at the end of 2022, while predictions of 6% mortgage rates have now been downgraded to a projected high of 4.5% by financial modellers.

Banks need to make money by securing market share and are becoming increasingly competitive, so expect rates to reflect this.

What to think about if you’re buying or selling in 2023

  • Get good mortgage advice
    With interest rates rising and uncertainty about exactly where they’ll end up in 2023, getting good mortgage advice has never been more important.
    Speak to a mortgage broker or independent financial advisor and discuss your circumstances before diving in an applying for a mortgage.
    A broker will be able to help you choose the right mortgage for you and should also have access to a wider pool of products from lender partners – given you more options.
  • Think carefully about waiting to buy
    Waiting to see how far property prices fall before buying can be tempting when the market is uncertain.
    However, if you’re in a good position to buy and can afford to do so, often taking the bull by the horns is a better approach.
    While holding off because prices are falling could mean you pay less for a property, if interest rates continue to rise in the meantime, any savings you make could be eliminated by higher mortgage repayments.
  • Buy for the long term
    When the property market is going through a period of chance, adopting a long-term approach to buying is often the best way to negate the effects.
    So, by buying a property that’s future-proofed for the long-term, getting good advice and choosing the right mortgage product, you’ll be able mitigate any effect of falling prices.
  • Make use of your local agent
    As well as good financial advice in times of uncertainty, it can also be beneficial to add a local Whitegates branch to your armoury.
    In a falling market, it’s always important to price your property correctly when selling but also ensure that the people viewing your property are proceedable.
    We can do that, through our experience and knowledge of local market conditions.
    We’ll also pre-qualify buyers, so only those who are able to proceed are given preference when viewing your home.

New read…

You can take away a lot of the stress of selling your home by being prepared and ensuring it’s ready to be sold.

Our guide is full of great tips on getting your home ready for the sales market.

How to Prepare Your Home for Sale

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