Winter Sales Market Report 2023

Winter Sales Market Report 2023

The UK housing market faced tough economic conditions at the start of 2023. Surprisingly, it has performed better than expected, with prices not dropping as much as anticipated. While transactions are somewhat low, they’re steady, and there’s a gradual increase in demand. Although 2024 might still pose challenges, things are stabilizing and starting to look up.

Heading in a positive direction

Inflation took a sharp drop to 4.6% in the year leading to October, down from 6.7% in September. This is the lowest rate since November 2021 and the most significant decline in thirty years (ONS). Lower energy prices are the main reason behind this drop, offering a welcome relief for the economy and the mortgage market. Predictions suggest that interest rates have peaked and are expected to decrease to 4.7% by the end of 2024 (HM Treasury, Average of Independent Forecasts, November 2023). The latest home buyer series from the Royal Institution of Chartered Surveyors, though still negative, shows the highest level of confidence in six months.

Moving positively forward

Despite a slight decrease in 2023, it’s important to note that house prices are still 25% higher than they were in September 2019, the last pre-COVID September (UK HPI September 2023). Prices in September have stayed nearly the same as last year, only decreasing by 0.1%. Additionally, both the Nationwide and Halifax house price indexes indicate a return to monthly house price growth in October (+0.9% and +1.1% respectively). Although mortgage approvals have improved by 9% since the beginning of the year (Bank of England), they’re still below the long-term average. A gradual moderation in prices is expected in 2024, but growth is forecast to resume, with an estimated cumulative growth of 5.8% between 2025 and 2027 (HM Treasury, Average of Independent Forecasts).

It’s still a buyer’s market, with more properties available as the shortage caused by the pandemic starts to ease. The number of homes for sale is now slightly below 2019 levels (Rightmove). Buyers are more conscious of prices and are choosy. Notably, homeowners are overestimating their property’s value by an average of 15%, which is higher than the 11% seen in 2022 (Quick Move Now). This means sellers need to set more competitive prices to make a sale. Also, the time properties spend on the market has increased. In the West Midlands, houses currently sell in 59 days, the second quickest among all regions in England and Wales, although it’s 23 days slower than a year ago (Rightmove).

If you are considering selling your property in 2024 and would like a no obligation valuation please reach out to our Sales Team on 0121 745 2225 or 0121 742 0404 and we will be happy to assist you.

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