There’s been a lot going on in the housing market this year. We started 2022 with months of record-breaking house price increases, huge levels of demand from buyers, and homes selling more quickly than ever before.
As the year progressed, we started to see the market settle down after an exceptionally busy two years, and were returning to the kind of housing market we’d seen in the years prior to the pandemic.
And then interest rates started to increase, and some buyers put their moving plans on hold as mortgage rates also climbed.
So how could the events of 2022 affect the property market next year? Here’s how things are looking right now.
What could happen to house prices in 2023?
This year we saw asking prices in Great Britain rise by 5.6%, to an average of £359,137. This was almost £17,000 higher than in 2021, when prices increased by 6.3%.
In 2023, we’re forecasting that average asking prices will drop by 2%, which means prices will still remain higher than they were after the incredibly busy home-moving period of 2021.
One of the main drivers of the house price growth we’ve seen over the past two years has been the imbalance of supply and demand, with far more people looking to move than there were homes available for sale. And in a more settled housing market, buyers will have the time and space to make sure they find the right home for them. As a result of this, we anticipate the time it takes to sell a home increasing to what we’d expect to see in a more ‘normal’ housing market, of around 60 days.
Our property expert, Tim Bannister, says: “After two and a half years of frenetic activity, it’s easy to forget that having multiple bidders immediately lining up to buy your home was the exception rather than the norm in pre-pandemic years, and there will be a period of readjustment for home-movers as properties take longer to find the right buyer.”
