It’s been a turbulent 2022 for the property market and although house prices where at an all-time high mid-year, they started to take a tumble at the end of 2022. This drop was mainly due to the fallout from late September’s mini budget, forcing the overall economy into a new chapter of turmoil and decline, not seen since the financial crash of 2008.
So, in the midst of a cost-of-living crisis and eye watering inflation, what does 2023 hold for the property market, prices, and affordability? Here we look at what industry experts are predicting for the year and give insights to help you make that all important decision for a move in the year ahead.
With the average property now coming to market
carrying a price tag of £362,438, up 0.9% compared to last month, this is the highest it’s been for this time of year since January 2020. But can this new year flurry of activity following the lull at the end of '22, be a sign that the market is still buoyant? Well, yes it is, according to Tim Banister, Rightmove’s Director of Property Science
, but only if your house is priced correctly.
"The early-bird sellers who are already on the market and have priced correctly are likely to reap the benefits of the bounce in buyer activity, while over-valuing sellers may get caught out as property stock builds over the next few weeks and months, and they experience more competition from other better-priced sellers in their area,”
In the last 3 months, Lucian Cook from Savills estate agents reports 32% of property chains have collapsed,
up from 24% in the first 8 months of '22.
Lucian believes higher borrowing costs and fears of negative equity are “driving buyers to make lower offers or to pull out of deals altogether.
Add these factors to house sales taking longer to complete in 2022 since 2009 and you have the perfect storm for property chain collapses.”
Also more prevalent is 'gazundering'.
This is where buyers haggle over the asking price right before the sale is due to complete
. It’s not only Savills reporting this, London law firm Osbornes
have seen a significant increase in gazundering and estimate it's currently happening in around 50% of sales.
Focusing on current market uncertainties, Kim Kinnard, Director of Halifax Mortgages
offers her commentary after a 'mixed 2022'
in the latest Halifax Price Index. “As we enter 2023, the housing market will continue to be impacted by the wider economic environment and, as buyers and sellers remain cautious, we expect there will be a reduction in both supply and demand overall, with house prices forecast to fall around 8% over the course of the year.”
Kim Kinnard’s predictions of a market slowdown in 2023 is also mirrored by the sentiment of the OBR (Office for Budget Responsibility)
, which all be at a slower rate over a longer period of time, has predicted a 9% drop in average property prices by 2024.
Reporting on slow market growth, Nationwide discusses the continuing fallout
from the mini-budget, with the most pronounced market slowdown in the Southwest of the UK, where annual house price growth slowed from 12.5% to 4.3% at the end of '22.
Nationwide believe mortgage rates are taking longer than expected to normalise and “activity in the housing market has shown few signs of recovery.”
With predictions that real earnings are to fall further and the labour market projected to weaken, Nationwide forecast a “tepid” start to 2023
until the broader economic outlook improves and "house prices are likely to see a modest decline in 2023 (perhaps of c.5%), says Robert Gardner, Nationwide’s Chief Economist.
WHAT'S THE VERDICT?
The cost-of-living crisis, mortgage rates, and high inflation - which hit 10.5% in December - all are impacting the housing market, and there is no doubt it's making buyers and sellers nervous.
However, with Rightmove reporting buyer demand up by 4% in the New Year compared to the same 'normal' pre-pandemic period of '19, and prospective buyers sending enquiries to agents up by 55%, there are glimmers of hope, so it's not all doom and gloom.
All the experts agree that house prices certainly won't go up in 2023, all signs point to the market declining over the course of the year, so if you want to move you should go for it sooner rather than later. But, as Rightmove's Tim Bannister reminds us, it’s all about being realistic with your asking price, so set the right price from the get-go and don't over-value. Do your research in your area and price accordingly, you won't be protected against the gazundering trend, but at least if your home is carrying the right price tag, you may reduce the chances of it happening.
HOW CAN SPRING HELP?
If you want to sell your home and guarantee against any form of gazundering, that's where Spring
Spring simply buys your home directly from you, eliminating any risk of your sale falling through or annoying gazundering. With 2 independent estate agent valuations, and a free survey from the Royal Institute of Chartered Surveyors, our final guaranteed offer to you will not change
. This means you can relax and plan your move ahead, safe in the knowledge your home sale is guaranteed to complete on a date of your choice, without any last-minute price haggling.
To find out more about selling your home to Spring and receive a free no-obligation valuation, give our friendly team a call. Get in touch by phone on 020 3966 9345
or drop us email us to [email protected]