What will happen to the property market in 2023? A word from our MD
Christmas is nearly here, and our hard-working sales and lettings teams are preparing for a rest, after one of our busiest years ever.
As the Managing Director of Daniel Cobb, I’d like to congratulate them for what they have achieved this year. The capital’s ongoing property shortage has meant working extra hard to help people find their perfect homes, and our teams have really stepped up.
I also want to extend my heartfelt thanks to all our wonderful clients, who have trusted us to deliver throughout this hectic and challenging year. With New Year just around the corner, it’s time for me to dust off the crystal ball and look at some of the housing market predictions that are gaining traction as 2022 ends.
What property market news can we expect in 2023?
With household bills currently soaring, anyone dependent on a mortgage will have their eyes fixed on the Bank of England’s base rate, which dictates the level of monthly mortgage payments. The good news is that after all the furore caused by Liz Truss’ ‘mini-budget’, the markets have calmed, and mortgage products are now less expensive than they were at the height of the crisis.
According to This is Money, the average mortgage rate in 2023 is likely to remain at around five per cent. That’s considerably higher than the historically low rates we have enjoyed since 2009, but a reduction on the current figure of around six per cent.
The pricing of fixed-rate mortgage deals has been coming down recently, and some mortgage specialists believe that if this continues, we should expect five-year fixed rate mortgages to drop below 4% by early 2023.
Will London housing market prices drop next year?
We have seen a few headlines forecasting a dramatic drop in the capital’s house prices, but most respected sources are predicting a fall of 5 to 6.5 per cent by the end of next year (the higher end of these figures would see prices returning to mid-2021 levels). The Financial Times predicts a fall of five per cent but adds that some markets may well “outperform”.
Those of you seeking to trade up to a larger home or get on the property ladder will welcome the news that prices are finally softening. However, strong underlying factors – such as high employment figures and the shortage of housing stock in London - make it unlikely that we will see a serious price crash.
This means we can still expect tough competition for sought-after properties. The capital’s property market shortage is also affecting the rental market, with rents predicted to rise by 6 per cent next year.
For those looking to buy and holding off because they’re expecting house prices to fall, we’d suggest that the hard earned deposit you have saved will be depreciating at a greater rate than any potential fall in house prices, so our advice is not to wait and act sooner rather than later.
How can we help in 2023?
As 2022 draws to a close, we look forward to another busy year ahead. If we can help with your moving plans in 2023, we would be delighted to hear from you. Finally, I’d like to wish you a very merry Christmas and a Happy New Year from everyone at Daniel Cobb!
