House prices in the United Kingdom increased by more than 10% annually throughout the pandemic, overheating the market. The end of 2022 saw a decline in real estate prices, but asking prices defied predictions in January 2023 by increasing 0.9%, according to the real estate website Rightmove.
2022 was undoubtedly a difficult year, marked by a frenzied combination of rising home prices, rising mortgage rates, and declining property values after the disorganised government mini-budget.
How will these events affect the property market in 2023, and what will happen to the asking prices? Read on to know.
What do experts say about house prices in 2023?
The imbalance between supply and demand, with many more people wishing to relocate than there were properties for sale, has been one of the major factors influencing the increase in home prices seen over the previous two years. For instance, Manchester, a premium option in the property market, is currently observing the effects that a lack of supply and a quickly expanding population can have on home values. Over the past five years, Manchester’s real estate values have performed extraordinarily well. Reliable estate agents in Manchester can assist investors in carefully investing in this hotspot region.
Additionally, buyers will have more time and space to ensure they discover the ideal home in a more stable housing market. As a result, it is predicted that the time it takes to sell a property will increase to about 60 days, which is what would be expected in a more “normal” housing market. Experts at Rightmove forecast a 2% decline in average asking prices in 2023, implying that prices will still be higher than they were following the very active 2021 housing market.
Is relocation still a choice?
According to a poll conducted by Savills in December, buyer commitment had increased since the firm’s previous survey in August. It is anticipated that needs-based buyers will be the most active buyer groups in early 2023, with equity-rich buyers returning as the year progresses.
The following statistics were extracted that give us a clear picture of the buyers’ preferences:
- 41% of survey respondents who stated a reason for relocating did so due to downsizing.
- 36% of the respondents were upsizing.
- Relationship problems, death in the family, or career changes all contributed to 23% of people entering the market.
- 3% of respondents overall indicated they were determined to move within the next three months, and 12% said they planned to do so within the following six months.
- According to 77% of Savills brokers, more purchasers would be looking to benefit from decreasing prices in 2023.
With buyers ready to sail the boat to their new homes, the first and foremost thing to do is to value your property. Book a valuation so that you don’t fall behind. Property Valuation Manchester can help you with a great start to the new year.
What does the new ‘normal market’ look like?
A more ‘normal market’ is anticipated to prevail in 2023, and Rightmove predicts a rather smooth landing. It predicted the following:
- In 2023, prices are expected to decline by 2% on average, with some areas and property types performing better than others.
- Views of homes for sale are up 11% from last year, suggesting that viewers are actively looking for homes and exploring alternatives.
- They forecast a return to the pre-pandemic market in 2023 when buyer demand increases as mortgage rates begin to stabilise.
Although pric drops will be moderated by a small number of forced sales, a 2% overall decline in average asking prices is predicted in 2023 as economic headwinds continue slowing down activity and ushering in a more normal market.
Due to the restricted housing supply, significant price cuts are thought to be unlikely. As always, prices of homes in attractive regions are likely to remain constant.