The housing market has been a little turbulent in recent times. With the huge slowdown during the Covid-19 pandemic followed by an upsurge afterwards with people looking to move home as they re-prioritise what was important and also the stamp duty holiday motivating people to move. This was then followed by uncertainty in the market following the massive inflation surge after the start of the war in the Ukraine and the resultant increase in interest rates and then the turmoil produced by the Mini-budget announced by Kwasi Kwarteng in September which all led to two months of property price depreciation in November and December. Now, to be fair, December is always a relatively quiet month on the home moving front as people look forward to Christmas so a small decline isn’t unusual. This is then, typically, followed by a bounce back in January as people start to look at moving again.
According to a recent review by Rightmove January 2023 saw the biggest new year bounce in 3 years with average house prices jumping 0.9% to an average of £362,438 in Great Britain. Although prices are still below the records set in October 2022 this bounce back is very positive for the outlook in 2023 and, according to Rightmove, January the 5th 2023 was the third busiest day ever for people asking agents to value their properties with a view to selling. Added to this, the first couple of weeks in January saw a 55% increase in enquiries with estate agents from potential buyers compared to the last weeks in 2022.
The outlook into 2023 is then looking good and certainly the signs are that the market seems to be returning to some semblance of normality after the ups and downs in 2022. It is predicted, though, that the first half of 2023 might be a little tight as the full effects of interest rates and inflation bite, but it is expected to peak towards the end of the first half after which the market is predicted to strengthen again as inflation is hopefully brought under control and interest rates stabilise. There is a thought that prices might drop by around 2% in 2023, but the good news is that, with the large price increases that we saw after the Covid pandemic, this potential drop means that prices will be at the same level they were in March 2022 which was significantly more than the average prices in 2021 which was also a very buoyant year.
It is expected that buyer interest will still remain high, albeit below the peak in 2021. Despite this, when compared to the last “normal” pre-pandemic year of 2019 buyer demand is expected to be up 4%.
Whilst the market has been subdued for a few months and was very up and down in 2022, the signs in 2023 are that people are looking to buy and sell and that prices are stabilising and are on the up again. The bounce that has been seen in early 2023 is very encouraging and those who have taken the plunge to sell early this year are likely to reap the rewards of increased buyer demand.
