The UK housing market has been rather dynamic, to say the least. From a drastic shift in buyer demand during the start of the Covid-19 pandemic to the average price of property reaching an all-time high as an after-effect of the pandemic, the UK housing market has really seen it all. From the availability of 5 per cent mortgages in the early stages of 2021 to the drastic increase in mortgage rates in the past few months due to the rising rate of inflation, the UK housing market has certainly seen its ups and down. So, what is happening in the UK housing market in 2023? Are more homes entering the UK housing market and are property discounts on the horizon?
According to recently published data from Zoopla, the average price of property in the UK is expected to remain relatively stable in 2023, which is good news for buyers. In 2023, experts at Zoopla have claimed that around 18 per cent of all the homes that are currently listed on the website have seen a 5 per cent or higher drop in asking price. Is this a sign that property discounts are on the horizon? According to estate agents in Selby, it could be; recent market data has shown price reductions and property discounts in the UK usually come about after 8 weeks of a property being on the market. We also need to remember that the average selling time for properties in the UK has increased in 2023. Usually, it would take sellers and homeowners around 25 to 26 days to find a buyer in 2022, however in 2023 this selling time has increased to approximately 50 days. As per recent market data, this has been the longest selling time average that the UK has seen since May 2013, which was a decade ago. One major reason for discounted properties could be the extended selling time; sellers and homeowners are reducing their asking price to attract more potential buyers in the hope of closing a sale quickly.
Another factor that will directly impact the UK housing market is the increase in mortgage rates due to the rising rate of inflation. Many landlords are choosing to sell their property to avoid facing higher mortgage rates. Around 11 per cent of the properties that are currently listed on Zoopla were previously given out on rent, which means that many landlords are choosing to sell instead of paying higher mortgages. Many of these properties have a 25 per cent lower asking price than other such properties on the market which makes them more attractive to first-time buyers. While higher mortgage rates may not be great news for homeowners and landlords who are still paying off their mortgages, it certainly is working out well for potential buyers and first-time buyers as the supply of properties in the UK is increasing.
Despite the dynamic changes in the UK housing market, there are active buyers and sellers in these markets. Recent data from property portals have shown that properties in London and North East England are highly in demand, with buyer demand and the number of overall sales being 10 per cent higher than the national average. On the other hand, in areas such as the Midlands and South England where property prices rose drastically over the last 3 years, the buyer demand is relatively low. Considering properties in London were never considered ‘afforadble’, how is buyer demand increasing in London? For one, the average price of property in London has not risen drastically making it relatively affordable. In fact, affordability in London has actually improved in the past 7 years due to the below-average rate of inflation in the area. Essentially, the increase in migration, the increase in buyer demand and the increase in the supply of property in the past few years have led to more buyers entering the London property market.
Most market experts agree that the best way to navigate the current property market is by making sure that sellers price their properties realistically while keeping the extended selling timeframes in mind. Sellers may also have to accept that discounts are on the horizon as more homes enter the UK housing market in 2023.