Home Business Insights & Advice How far will uk house prices rise in 2023?

How far will uk house prices rise in 2023?

by John Saunders
28th Jun 22 3:39 pm

There is no doubt about it: the UK is in an unprecedented seller’s market. Inventory is at an all-time low, households have been accumulating wealth, and families are looking to improve their living arrangements to adapt to their new, post-pandemic lifestyle.

But the “race for space” that has been fuelling today’s housing market is slowing down, the stamp duty holiday has expired, and the rising cost of living is causing home buyers to reconsider their priorities.

So, will house prices continue to rise? Or is the bubble about to burst? Here’s what experts predict for 2023 and beyond.

The UK house market in 2022 at a glance

In June, the property prices hit a fifth consecutive record, reaching an average market value of £368,614. As the number of properties entering the market continues to remain low, demand is still high for each available property, which stays on the market for barely four months.

At the same time, the trends seen during the first months of the pandemic are starting to change. The higher cost of living – exacerbated by the Ukraine-Russia war – has started to weigh on the finances of house buyers. What’s more, the rising inflation, less convenient mortgage deals, and higher interest rates are making it more challenging for buyers to secure the right deal.

While these socioeconomic factors might cool the market over time, there is still a significant demand for increased living space and better living arrangements, which continues to fuel the sale of over 100,000 properties per month.

Tracking the value of your property in today’s fast-changing market

Understanding how much your home is worth in today’s fast-changing market helps you make the right choices, especially if you are looking for the perfect moment to sell it. On the other hand, if you are in the market for a new property, tracking the homes you are interested in can help you find the best property for your budget and financial goals.

While house prices are rising quickly, you can obtain an estimation of a property’s value by accessing trusted market data and completing an online valuation with a real estate portfolio management platform.

Virtual valuations are faster and more affordable than traditional ones, which means that you can track the value of your real estate, see your home’s equity, and check if you can save on mortgage deals at any time. Property value trackers can also deliver personalized renovation recommendations to boost your home’s value and suggest a suitable insurance plan for your budget.

The house market trends to watch for in 2023 and beyond

Predicting the house market’s fluctuations is always challenging, but it is especially so in today’s unprecedented conditions. However, here are some of the emerging trends highlighted by property economists and experts.

House prices will peak at the end of 2022

House prices are not showing signs of decreasing in 2022, and experts predict that, as demand remains high and mortgage deals accessible, property values will climb by 8% over the course of 2022, peaking later this year.

Rising inflation and interest rates might hit house prices in 2023 and 2024

According to senior property economist Andrew Wishart, property prices are bound to fall marginally over the next two years. The 5% drop is mostly due to the higher inflation, which is triggering an increase in living costs, and growing mortgage rates, which are bouncing back from the all-time low reached during the pandemic.

The predicted price drop will make it more affordable for buyers to secure a property, but it will barely reverse a fifth of the house price growth caused by the pandemic.

House prices are expected to grow by 13.6% by 2025

While the fear that the house prices could plummet still stands – especially earning from what happened after the 2008 economic crisis -estate agents predict that the market bubble won’t burst. Instead, house prices will plateau over the next years and grow at a much lower rate compared to during the pandemic, but will still grow by 13.6% cumulatively by 2025.

Given the uncertainty surrounding the market, it is reasonable to wonder whether this is a good time to buy or sell a home. Since this varies greatly depending on your financial goals and investment needs, partnering with a specialized advisor is the best way to understand what will work best for your unique circumstances.

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