09 Nov Property predictions for 2023

Whether you own your home, rent a property or are a buy-to-let landlord, it can’t be denied that 2022 has been a challenging year in the property sector. Rents and house prices up and down the country began to rise and mortgage rates increased too. But what exactly can we expect to see in 2023? And what impact will it have on you? We reveal our property predictions for 2023.

Historic lows

A number of experts in the property market expect house prices to fall in 2023 – with some saying we could see prices fall by 10-15%. It comes after mortgage providers pulled deals and raised interest rates – reducing how much the average buyer can afford to spend on a new home. 

What’s more, with monthly mortgage payments at an all-time high, many people that were originally thinking of moving may have to rethink these plans – either searching for more affordable properties or not searching at all. 

After a 13-year property market boom, the number of inquiries fell for a fifth month in a row last month – with property sales at the lowest level since May 2020. New instructions are falling too and stock is at a historic low.

Rental demand 

It’s hardly surprising that this has had an impact on the rental market – with a surge in demand yet a reduction in new landlord instructions. Plus, when there’s a rise in the number of people looking to rent, it’s likely that rental prices will continue to rise.

These rising payments will actually help landlords to pay for their mortgages though. However, a change in renewal tests means that as many as 30% of current buy-to-let loans might not be approved for renewal at the same rate. 

Putting it in context

While a 10% drop in house prices does seem daunting, this decline would actually revert house prices to similar levels of summer 2021 – after they remained strong throughout the pandemic. During the Global Financial Crisis, house prices fell by nearly 20%. 

What’s more, despite the current market, which is expected to still be felt in 2023, many in the industry are advising those who are looking to move to stay calm and get advice from an experienced mortgage specialist. Lots of banks and mortgage lenders have explained that the choice to remove deals was a temporary measure so we could see more deals in the future.

With so much guidance online, it can be difficult to determine the best course of action for your individual situation. This is another reason why it pays to speak to an expert. At Kaytons, we have a dedicated contact that we’d be delighted to introduce you to. 

Of course, we can’t ignore the fact that high inflation puts a huge strain on the majority of households and impacts consumer confidence in spending too. The biggest piece of advice we’re giving our customers is to keep calm and not to make any hasty decisions. If you want to discuss the current property market or your individual situation, our team is always on the other side of a message.