It is safe to say that 2022 was quite an eventful year for the UK property market, with the average price of property reaching multiple highs. Month after month, the average price of property continued to rise and many experts predicted that this trend could continue in 2023 and 2024. Breathing a sigh of relief for property buyers Jmdhindi, the UK property market started to cool down in 2023. This could be credited to various factors such as the rising rate of inflation, the increasing cost of living as well as higher utility bills and expensive mortgage rates scooptimes. So, what are the predictions and opinions of industry experts regarding the future of the UK property market in 2023?
As property prices started cooling down towards the end of 2022, many market experts predicted that property prices will fall in 2023 newsintv. Halifax predicted an 8 per cent drop in the average price of property in the UK while Savills predicted a whopping 10 per cent drop in property prices. Nationwide predicted that property prices will drop by a mere 5 per cent and then start rising by the end of the year. So, what will happen to UK property prices in 2023? Estate agents in york said that the average price of property in the UK fell by 1.1 per cent from December 2022 to January 2023. March 2023 saw a 0.8 per cent month-on-month fall based on the Nationwide House Price Index. According to Nationwide, the UK property market hit a turning point after the mini budget in September 2022 and the dynamic turbulence that followed. Based on these reports famousbiography, most leading industry experts predict that the price growth will remain slow but steady in 2023, with a substantial boost in 2024. This boost in 2024 could be due to the stabilizing interest rates, the controlled inflation and the increase in affordable mortgages.
Well, what is driving the change in property prices in the UK in 2023? For one, the mini-budget that was presented in September 2022 by Chancellor Kwarteng was shocking, to say the least. This mini-budget led to an almost instant increase in mortgage rates. The Bank of England also increased its base rate to 4.25 per cent, which means we have seen a rise of 0.25 per cent in March 2023. Experts predict that the base rate can go up to 4.5 per cent in 2023, which will directly impact mortgage rates. It is expected that even the best fixed-rate interest mortgage deals could cross 5.5 per cent in 2023 along with stringent lending criteria which will make securing a mortgage even more difficult. Some experts believe that the mortgage interest rate can go as high as 8 per cent in 2023! Simply put, a higher mortgage rate means that fewer buyers and investors will have the ability to purchase property which will automatically reduce buyer demand. As buyer demand slows down, so will the supply which in turn will bring down the average price of property in the UK in 2023. With that being said, as soon as the mortgage rates decline and the rate of inflation is controlled, we could see an increase in buyer demand once again.
If the UK property market remains dynamic in 2023, then who wins and who loses? Experts predict that tenants and renters are the ones who are going to lose out the most because the rents could rise even more in 2023 due to the heavy imbalance between demand and supply. With affordable housing becoming almost impossible to find, many potential buyers are choosing to rent properties which is what is leading to the increase in demand. Higher rents coupled with the increased living costs and utility bills are reducing the number of choices for tenants. On the other hand, this has given landlords and investors the much-needed push to invest in rental property as they are sure to receive a decent return on investment in the long run. With the demand for rental property reaching its peak, now would be the right time to invest in the UK rental property market. With that being said, in order to control the rising rate of inflation the UK government is pushing many home buyer schemes and first-time buyer schemes to help people climb on to the property ladder.
