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According to reliable data, UK property prices are at an all-time high in 2022. The average cost of a property in England in July 2022 was just under £310,000, which is slightly more than a 15% increase on the average UK property price just a year earlier.
Statistics like these can be music to the ears of property owners looking to sell off investment property or holiday homes. But they’re a source of dread and panic among home buyers, especially those looking for their first footing on the ladder.
So, what will property prices do in the UK in 2023? Will the boom continue or are we heading for a reversal?
Some experts are predicting UK property prices to fall by as much as 5% in 2023, while others are predicting prices to slightly increase.
Supply and demand dictate what happens with prices, so we need to look at what affects these factors. Property prices will decrease when there is less demand to buy property. When there is increased demand, it pushes the price up because vendors can expect to achieve more via increased competition. On the other hand, reduced market competition and increased supply gives the edge to buyers. The current situation seems to be that both demand and supply are at reduced levels, so prices may well maintain an even keel after a slight correction from a slightly overheated position, particularly in asking prices.
Many prospective buyers are being put off buying property at the moment due to rising mortgage interest rates and a higher cost of living, which all stem from surging inflation caused by an agglomeration of factors. Higher interest rates can also decrease prospective buyers’ mortgage borrowing power, and therefore reduce their available budget to buy a property.
Two leading expert groups believe property prices will continue to steadily increase in 2022 before decreasing in 2023. But there seems little agreement on how much prices will change.
Capital Economics has suggested prices will decrease by up to 5%, whereas a leading estate agent predicts just a 1% fall and Rightmove predicts a 2% fall in asking prices. Some groups, including Knight Frank, have suggested that property prices will increase in 2023 but at a significantly slower rate than what happened during the pandemic. If we see a swift end to the war in Ukraine, this should lead to a continued decrease in energy costs which in turn will lead to lower inflation and a drop in interest rates. Banks are already starting to offer lower fixed rate mortgages. So without a crystal ball, predictions are largely guesses. So many factors affect the housing market but as a nation of people who want to own their own home, medium to long term house prices are historically always going to be on an upward trend.
If you’re thinking about selling your home now or next year, book your property valuation with Hearnes. We can provide accurate property valuations based on real-time data and future projections, helping you pick the perfect time to stick or twist.
A property valuation is a projected value of a property in the current market.
The conveyancing process requires due diligence and care, but many professionals in the industry are suggesting that the timeframe to get a property purchase over the line is becoming increasingly slow.
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