Along with high inflation, a marked increase in demand and impinged productivity in the global construction sector, we’ve seen average property prices rocketing in the UK. Whether you’re a new buyer looking to get on the ladder or a homeowner looking to sell your property, navigating the increasingly turbulent housing market can be tricky to say the least – but when can we expect the market to stabilise and are house prices set to drop this year?
House price hikes – In recent years, a combination of factors including high inflation, increasing demand and supply chain issues exacerbated by the COVID-19 pandemic have caused house prices in the UK to soar. Between 2020 and 2021 (a period in which the construction industry faced peak disruption and developing backlogs), the average price of a house in England rocketed by 10.9%, hitting an eye-watering £315,000. Similarly, dramatic price hikes were seen in Scotland, Wales and Northern Ireland in the same period, where average house prices increased by respective totals of 5.5%, 10.7% and 10.7%. Despite a steady decline in the second half of last year, another increase was reported in early January 2023, where it was revealed that the average price of a property in the UK now stands at £362, 438 – an increase of 0.9% since December 2022.
Predictions for the rest of 2023 – Essentially, the macroeconomic outlook for 2023 depends on a wide range of underlying factors including interest rates, mortgage rates and the rate of global inflation. While the number of mortgage approvals may have significantly declined, there’s good news for housing prices – average house prices have already started to fall as of the second half of January 2023. It’s highly likely that prices will continue to fall throughout the year as sellers reduce prices to pick up the slack in demand and ease buyer anxiety following the dramatic price hikes of recent years.
What you should do if you are considering buying/selling? – Many prospective buyers and sellers have been reluctant to go through with any major decisions until the market stabilizes, and whether or not 2023 is a good year for you to make the move depends entirely on your personal circumstances. If you are considering striking a deal and buying or selling property this year, ensure that you compare conveyancing solicitors fees to get the best deal and ensure that you have a safe pair of hands dealing with the legalities of the move. Before making any decisions, create a realistic budget and do some market research of properties in your locality – you may decide that it’s best to hold off a few months until prices drop even further.