2023 Housing Market

Towards the end of last year we saw mortgage rates, cost of living and inflation rise. This added a huge pressure to already stressed housing market. This blog discusses what we think we will see in the next few months following the New Year.

In December 2022 the mortgage rates began to slow in comparison to the prior months. With the Bank of England base rate creeping up to 3% in November and set for another increase the housing market will likely reflect this shift. Savills expecting the base rate to increase 4% in early 2023 and potentially even 5% towards the end of the year.


Whilst the Bank of England base rate is set to rise steadily most mortgage lenders have cooled down on the huge hikes in interest rate rises. 

Following Liz Truss’s speech back in September and the subsequent rise in mortgage rates most lenders have cooled from this period. But there has also been a number of other contributing factors to the 10% drop in new mortgages. The Christmas period is always notably quiet as everyone wants to stay put and take up house hunting the following year. 

Whilst it is always hard to predict many specialists, brokers and estate agents have their own views. They believe that the last couple of months and the next couple could see hard times, especially for First Time Buyers. However whilst interest rates are continuing to rise many brokers believe that this will be short lived and may see them even decline at the tail end of 2023.

House Prices and Market Buoyancy

For the past three years we have been revelling in a buoyant market, taking the most for excessive house prices, low stamp duty, record low interest rates. Now is a different picture. Interest rates rising, stamp duty holiday over and house prices tumbling. 

With all that being said its not all doom and gloom for the housing market, or for people looking to buy/sell. Whilst the housing market is likely to lose value through to 2024 it is a housing correction rather than a ‘crash’ that the media are making it to be. Every couple of years the market will ‘correct’ which after a period of rising prices is always likely. People will still likely sell their home with equity and buy at more reasonable prices. 

Looking at the graph above (credit Pygott and Crone) you can see that the average house price in 1990 was only £58,000, and over the years the properties have slowly increased in value despite the ‘crash’ and other negative affects for the housing market.


Whilst it has all seem doom and gloom for the last couple of months the market is look to balance out in the next year. The first half of 2023 will be harder on the market with lower house prices and unforeseen inflation/interest rate rises. The second half of 2023 is looking to settle and calm down which will give First Time Buyers more of an advantage.