HOUSE prices could drop by two percent in 2023, according to property website, Rightmove, in a boost for buyers.
The year 2022 started 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, the market settled down after an exceptionally busy two years, and looked set to return to the kind of conditions seen in the years prior to the pandemic.
However, 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, according to Rightmove experts.
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, Rightmove is forecasting 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 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, the firm said.
As a result, they said they anticipate the time it takes to sell a home will increase to what would be expected in a more ‘normal’ housing market, of around 60 days.
Property expert at Rightmove, Tim Bannister, said: “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.”
Are people still looking to move?
After the uncertainty brought about by interest rate rises and high inflation, Rightmove says it is seeing signs that some buyers are ready to get started with their home moves as we head into the New Year.
This month, views of homes for sale on the site are up 11% when compared to the same period in 2021, suggesting 2023 moves are on the cards for those who are able to do so.
Tim added: “We’re heading towards a more even balance between supply and demand next year, but we don’t expect more significant price falls in 2023.
“This is reflected in our prediction of a relatively modest average fall of 2% next year.”