UK property market 2023 and beyond.
Rightmove's latest house price index showed that the average asking price of newly marketed properties drops by 1.9% this month to £364,895. Do not forgot is asking price, should be good to know what is difference between asking price and sold price.
Rightmove said the decrease comes in response to rising mortgage costs and increasing buyer affordability constraints
It said that the number of available properties for sale is also 12% lower than at this time in 2019.
Nationwide, one of the country's biggest mortgage lenders, predicts prices are set to fall 5% in 2023 as the property market continues to cool.
Persistent core inflation (currently 6.9%) and wage pressures will prevent the Bank of England from cutting interest rates until 2024, which means mortgage rates won't fall any further until next year. The latest Bank of England base rate is: 5.25%. This is an increase of 0.25%, and was announced by the Bank of England (BoE) on 3 August 2023. From 1 September 2023 will banks of Base Mortgage Rate (BMR) will increase from 6.50% to 6.75%.
Will there be a house price crash?
A crash in British home prices is unlikely but they will dip further this year than earlier thought as the cost of living crisis and rising borrowing costs take their toll on indebted buyers.
As in much of the world, home prices soared during the COVID pandemic as buyers sought additional living space and took advantage of low interest rates, but with high inflation proving sticky the Bank of England embarked on an aggressive rate hiking path and is likely not done yet. The last time property prices crashed was during the global financial crisis.
UK house prices reached an average of £190,032 in September 2007 and had dropped to £154,417 by February 2009 - a fall around 17% based on Nationwide. That was the most decline in last seven decades.
They did not regain that peak until August 2014.
Rising interest rates, which have caused mortgage rates to skyrocket, will mean house prices are likely to drop over the next few of months.
And the Bank of England does expect the recent falls in house prices to continue due to higher mortgage rates around 6% in end of 2023.