Property market trends and 2023 forecast

To say the housing market in 2022 has been turbulent is an understatement. The year saw a mixture of ups and downs with the beginning of the year being particularly strong, still supported by low interest rates and demand from potential buyers, while the second half saw an almost inevitable slowdown. Every time after such a rapid growth in prices and considering the economic headwinds as well, a slump in the market is expected. Not only has the increasing cost of living put pressure on many households but the rising interest rates have massively impacted people’s monthly mortgage payments, making it understandable why there’s been a decline in demand as both sellers and buyers have become more cautious. A year in review This year was one of records with both the interest rates reaching record highs and house prices soaring to an average of £371,158, according to the property website Zoopla. In the period between January and August of last year, there was a record high price growth of 6% as well as a shocking 71% increase of house prices over the last decade alone. This has made the market a sellers’ one with the power being mostly in their hands since the buyer demand has been higher than the number of properties available on the market. However, towards the end of the year, economic headwinds have shaken the market and affordability has rapidly declined due to factors such as the rising interest rates and the energy crisis in the UK. This has now shifted the industry into a buyer’s market and made a lot of home sellers who wish to sell quickly fear that this may now take longer than expected. According to Hamptons, the average house seller in England and Wales who bought a property during the last two decades and then sold up last year, made a gross profit of £108,000. Having said that, property experts are trying to reassure sellers that even if prices continue to fall in 2023, it’s still highly likely that around 90% of home sellers will sell at a profit. Demand trend As already mentioned, there is now less urgency in the housing market and potential buyers are aware they hold the power and can take their time choosing the right property for themselves. And while they do that, home sellers are still hoping to secure a price that matches their expectations, even if it may have been readjusted in the last couple of months. This will likely lead to properties taking longer to sell, returning to a pre-pandemic normal time to find a buyer of around 60 days. According to Rightmove, the average national time to secure a buyer for last year was between 35-45 and it is continuing to increase. Remote living trend fading One of the key trends we have seen in the last two years has been the flight towards more rural and coastal areas. Since the pandemic and the fact that the majority of people were working from home and wanted to connect with nature due to being isolated for so long, the demand for more remote properties has been on the rise ever since. In fact, some of the highest house price gains have been recorded around Wales, Kent and the South West, showing that people really wanted to escape to the coastal and more rural areas of the country. However, now that the world has gone back to normal and the effects of the pandemic are fading, so is this trend as well. Zoopla reports a slowdown in these particular areas which once were on the rise and the focus for the new year will definitely be on something else. Forecast 2023 Entering the new year, it is expected that the market will continue to be largely impacted by the wider economic environment, leading to an overall reduction of both supply and demand as well as a forecasted fall of 8% in house prices over the course of the year, reports the director of Halifax. Some of the key trends for 2023 would include a focus on affordability and value for money as well as a rising demand for apartments over houses in more urban areas. Due to the influence of high mortgage rates and household struggles because of the cost of living and energy crisis, there will be a big focus on affordability in the new year with people being more cautious about their spending. That is closely connected to the value for money trend which is expected to dominate the market too. Therefore, the demand for apartments will soar and in order to support this, the government has already started working on ensuring cladding problems are resolved throughout. To conclude, property experts from the quick house sale company webuyanyhouse.co.uk predict that the housing market will settle into a more normal pre-pandemic level of activity as 2023 progresses and will continue to be impacted by the soaring inflation and uncertainty around interest rates and the economy as a whole. Byline: Simon Boden, property sales consultant at Webuyanyhouse.co.uk

Property market trends and 2023 forecast

This year was one of records with both the interest rates reaching record highs and house prices soaring to an average of £371,158, according to the property website Zoopla

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