2023 outlook for housing and mortgages

28 March 2023

The housing and mortgage markets have had a stormy 2022. Will the weather be set fairer for 2023?

Out with the old

The ‘mini-budget’ of September 2022 provoked a significant rise in average mortgage rates. Since then, however, rates have shown some signs of settling down and they are thought likely to remain steadier in 2023, following the Bank Rate rise to 3.5% in December.

After a decade of historically low interest rates, mid-single digits seem to be the new norm. For mortgage holders, the new reality of higher rates will have a knock-on effect on household finances, which are already squeezed for many.

House prices

The housing market looks set to face a significant downturn. House prices are widely projected to fall in 2023, following three pandemic-influenced years of growth.

Estate agent Savills predicts a 10% fall in house prices in 2023, before a return to growth from 2024 onwards. Despite this, the astronomical year-on-year rises of 16% in July 2022 and 13.6% in August 2022 seem unlikely to be repeated for several years.1

Buyers’ market?

The exact figures will depend on the various factors that influence supply and demand. In 2022, house prices remained resilient largely thanks to limited available stocks– this could again be a crucial determining factor in 2023. Demand, meanwhile, is expected to receive a lift from the raising of the nil-rate threshold of Stamp Duty in parts of the UK, while pandemic factors such as the need for more space and a home office might still play a part. If a modest decline in house prices is seen, with possible regional variations, desire to buy could be further accelerated.

Your future

With so many uncertainties as we move into 2023, we are here to guide you through the busy market and help you stay focused on your goals.

  1. Office for National Statistics, 2022

🚨 Data accurate as of the date of publication –  28.03.2023

🚨Think carefully before securing debts against your home.  Your home may be repossessed if you do not keep up repayments on your mortgage.

🚨 The above material is for informational purposes only and does not constitute a sales offer or financial advice. Before taking out any insurance, credit agreement or other financial product, you should obtain individual advice on your requirements and the general terms of the contract.


Source: Quilter Financial Planning – Essentially Mortgages Q1 2023

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