Your monthly UK housing market update – including sold and asking prices, RICS surveyor sentiment and predictions for the year ahead.
HM Land Registry – Sold Prices
As reported in the latest House Price Index, the average UK property price rose by 9.8% over 2022. This reflected slowing trends from November and October 2022, which saw increases of 10.6% and 12% respectively.
On a non-seasonally adjusted basis, house prices decreased by 0.4% between November and December 2022. This compares with an increase of 0.3% a year ago.
So, what was behind these figures?
The Bank of England reported supply of homes increased faster than demand in the final month of 2022. Adding to this was higher borrowing costs and affordability pressures, which weighed heavily on first-time buyers.
Even so, the number of residential transactions was 101,920 over December 2022. Although this was 1.4% higher than the previous year, it reflected a fall of 2.6% between November and December. Mortgage approvals also decreased (from 46,200 in November to 35,600 in December) – the fourth consecutive monthly decrease of the year.
Rightmove – Asking Prices
In their latest market report, Rightmove paint a positive picture for the start of the 2023.
Average asking prices rose by just £14 over February – bringing them to £362,452. While this is the smallest increase between January and February on record, it wasn’t the fall predicted by many market experts. The fact sellers are pricing realistically for the market hints at further positivity for the coming months.
Linked to this, buyers are regaining confidence. As a result, demand is slowly translating into sales.
Indeed, the number of buyers contacting agents in February was up by 11% on the same period in 2019. The number of agreed sales was just 11% down on the same period in 2019. This was a significant uptick from -15% at the start of the year and -30% after September’s mini-budget.
RICS – Chartered Surveyor Sentiment Survey
RICS Chartered Surveyors describe a muted start to 2023. Over January, sales, new listings, prices and buyer demand all witnessed downward trends.
Surveyors envisage this situation continuing over the coming months – as the market adjusts to higher interest rates.
Indeed, contributors reported a decline in new instructions over January, with fresh listings at -14%. With new appraisals also showing a net balance of -42%, supply issues are likely to remain in the near future.
In a similar manner, -39% of respondents saw declines in agreed sales. Near-term expectations also signal a further slip, coming in at -49%. In a glimmer of hope though, this negative outlook slightly improves at the 12 month horizon, increasing to -20%.
House prices were similarly down, softening to -47% (compared with -42% the previous month). In terms of predictions, this does improve to -40% at 12 months – but is still firmly in negative territory.
Zoopla – Housing Market Outlook
In their February Market Outlook, Zoopla note the housing market responding to increased mortgage rates much better than expected.
In addition, some mortgage rates for first-time buyers are back in the region of 4-5%. While these rates aren’t likely to get much cheaper in the short-term, this reflects more attractive deals for borrowers.
Like Rightmove, Zoopla report greater pricing “realism from sellers” looking to secure a quick sale. As a result, they predict reasonable turnover for 2023 with around 1 million sales. They’re confident in the market’s ability to withstand modest price falls, as long as buyer demand remains.
In good news, this demand is likely to stay – with homeworking, increased retirement and immigration as well as downsizing (driven by affordability pressures) all driving house moves.
Express Index
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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