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.
UK Property Market Update
For the first time since June 2020, annual house price growth dropped into the negatives, with prices down 1.1% year-on-year. February also saw the sixth consecutive monthly price fall, dropping .5% from the previous month, leaving prices 2.7% below their peak in August. The average house price dropped slightly from £258,297 in January to £257,406.
This recent string of low house prices started after the chaotic market response to the mini Budget that was announced last September. And while market conditions appear to have settled, housing market activity remains subdued. This is reflective of the issues going on in the wider economy as inflation continues to outpace wage growth while mortgage rates remain above normal standards. As a result, consumer confidence is at levels on par with those seen during the 2008 financial crisis.
With mortgage rates remaining well above those recorded in 2021, and the widely-predicted weakening of the labour market, experts predict that it will be hard for the market to regain momentum.
Even with the slight drop in house prices, current mortgage payments will remain out of reach for many prospective first-time buyers. Deposits have also been one of the biggest obstacles to owning a home and with the current cost of living crisis, that fact hasn’t changed.
There is some hope on the horizon, however. If economic conditions continue to improve and inflation moderates as those in the industry are forecasting, the pressure many UK households are facing should ease. If income grows as it should, house prices remain weak or decline further, and mortgage rates start to fall, housing will become more affordable.
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 – February 2023.
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