Monitoring the housing market is very important for many, particularly those doctors and dentists who are looking to purchase their first home or who are investing in buy-to-let properties. Our monthly Property Price Update gives you a summary of what the experts are saying.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
What’s happening in the UK Property Market?
In December, annual house price growth slowed yet again. Last month it dropped to 2.8%, down from 4.4% in December. The drop equated to a 0.1% fall month on month and while it is a smaller drop than previous months, it did mark the fourth consecutive month of price fall, the worst run since 2008. The average house price dropped from £263,788 in November to £262,068 in December.
The broader financial market has settled down for the time being, but mortgage rates have yet to catch up as the housing market is not showing enough signs of recovery to bounce back in kind. And experts are predicting that it will be hard to gain momentum as real earnings continue to fall and the labour market weakens as the economy continues to decline.
Looking ahead – What will 2023 bring?
Much of the slowdown can be attributed to the downturn in mortgage applications as increased mortgage rates have put many buyers off. Many potential homeowners might be waiting to see what mortgage rates look like this year before making any moves.
Recently, interest rates have returned to levels seen before the mini-Budget and if the trend continues, mortgage rates (which depend on interest rates) should follow suit and homes will become more affordable for buyers. Additionally, income growth combined with slow or even negative house price growth will improve conditions as well.
Many households should remain protected from increased mortgage rates as about 85% of mortgages are fixed-rates. And the industry-standard affordability stress tests performed during the mortgage application process usually test at levels higher than homeowners are experiencing now. So while increased rates may create a strain on homeowners, those who need to refinance will still be able to make repayments even during this difficult time.
Industry experts are looking toward the first three quarters of last year for reassurance despite weakened consumer confidence, a stagnant economy, falling incomes, and increased mortgage rates even if a true bounce back won’t happen until the broader economy improves.
Stay in the know
If you’re planning to buy or sell property this year, check back monthly for our regular update on the nation’s property prices and contact one of our advisers for personalised advice.
Figures quoted from Nationwide House Price index – December 2022.
Mortgages for Doctors and Dentists
If you’re planning to buy or sell property this year contact an advisor for personalised mortgage advice. Use our Mortgage Tool to search for a deal that suits your circumstances.
At Dental & Medical Financial Services, our experts are dedicated to helping our clients select the right mortgage deal for your needs. If you’re ready to take the first step toward home-buying, get in touch with us today.