Rising inflation and interest rates have added a degree of uncertainty to a UK property market that enjoyed unprecedented growth since 2021.
But while change is unquestionably afoot, it can be tricky to know what’s fact and what’s fiction if you’re considering a move in 2023.
We’ve pulled together this guide, with all the predictions for the 2023 property market and some helpful advice if you’re planning to buy or sell during these changing times.
Will house prices drop in 2023?
Property prices in the UK grew by more than 5% in both 2021 and 2022.
Price predictions for 2023 are looking far more reserved with many experts suggesting values will fall throughout the year:
- Rightmove predicts a 2% drop in prices
- Zoopla predicts prices will decrease by ‘up to 5%’
- Halifax suggests prices will fall by 8%
However, because of huge price growth in the previous two years, most properties would still be worth more than they were prior to the Covid-19 pandemic – even if these falls in value do come to fruition.
What will happen to interest rates?
Interest rate rises were a staple of the 2022 news agenda, with Bank of England rates increasing from 0.1% in December 2021 to 3.5% at the end of 2022.
There’s no doubt that the record-low cost of borrowing from the past few years is now a thing of the past.
But predictions of 6% mortgage rates in 2023 do appear to have been overblown, with rates starting to fall at the end of 2022 and a revised predicted rate high of 4.5% made by experts.
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 in 2023
- Get good mortgage advice
Getting good financial advice is always important before buying a property.
But when the market is changing and there’s a degree of uncertainty about how things will play out, it’s even more crucial.
With interest rates rising, it’s vital to secure a mortgage that works for you.
So, speak to a mortgage broker or financial advisor and explain your circumstances.
They’ll be able to advise you on the best mortgage product, while a broker may also have access to mortgages not widely available – giving you even more options. - Think carefully about waiting to buy
When property prices are falling, it can be tempting to wait and see exactly how far they fall before you buy.
After all, securing your dream home for less is always nice!
However, because interest rates are rising, too, any saving you make through waiting could be wiped out by bigger mortgage costs.
So, think carefully about your own situation.
If you’re a good position to buy now, doing so could be a better approach than adopting a ‘wait and see’ approach. - Buy for the long term
With mortgage costs increasing due to rising interest rates, buying a property that suits your needs for the long term is the best approach.
By purchasing a property that works for you over a longer period of time and selecting the right mortgage, you can help to protect yourself until the market is more certain. - Make use of your local agent
Working with our local Parkers branches can be a huge benefit for sellers in an uncertain property market.
Local knowledge is key, and we will help you to price you property correctly, based on how the market is performing where you live.
We will also pre-qualify all buyers as soon as they enquire about your home and ensure you’re negotiating with those who can proceed.
New read…
Spring might seem like a long way off when it’s cold and rainy outside.
But it’s a great time to sell your home.
Our guide to selling during the spring explains everything you can do to find the perfect buyer.
