Predictions for the 2023 Housing Market: Will House Prices Fall?

2023 housing market

What will the 2023 housing market bring? At the start of 2022, we made our predictions for the housing market this year. We said it would almost certainly be not more of the same and that seems to have been the case. 

There were a lot of questions about mortgage availability and costs, house prices, upturns, and downturns in markets and property, in general, to be considered. Those questions still apply for looking at 2023 predictions. 

For mortgage interest rates and availability, we predicted that the question was not whether interest rates would rise but more about when, and how much they will rise.

We also said that if the higher interest rates did impact the movement of mortgages, then the lenders would probably respond with attractive offers such as fixed-rate options to even things out. 

With regards to house prices going up or down, we saw the probability of an overall increase of 2.5 – 3%.

Overall it was almost certain that we weren’t going to see a radically changing market and ‘more of the same’ was not on the cards at the moment.

The biggest question that’s being bandied around at the minute is will the housing market crash in 2023.

What will happen in 2023 housing market? Here’s our thoughts 

What happened to the market in 2022

Rates are rising, house prices are slowing down, and it’s all changing so quickly.

According to Rightmove, the average property asking price hit £369,988 in July 2022; up by 9.3% from 2021.

We have seen inflation soar, costs of debt rise and turmoil in the mortgage market.

September, when the average mortgage rate stood at 4.2%, monthly mortgage payments had reached 26% of our theoretical buyer’s income.

According to Rightmove the average price of property coming to market drops has dropped by 2.1% (-£7,862) in December, a bigger dip than usual at this time of year:

  • The new seller asking prices are 5.6% higher than a year ago, versus 6.3% annual growth in 2021.
  • The number of views of homes for sale on Rightmove is up 11% a sign that many potential movers are monitoring the market in detail and weighing up their options.
  • As mortgage rates settle down, buyer demand over the past two weeks is 4% up on the same period in 2019.
  • The average asking price of a newly listed property drops by 2.1% this month (-£7,862) to £359,137. Although, the average asking prices are 5.6% higher than at this time a year ago, only slightly below the 6.3% growth recorded in 2021.

Mortgage interest rates and availability

In November the Bank of England raised its base rate to 3% in an attempt to reduce inflation costs, the biggest rise we’ve seen in years. 

As inflation has continued to rise we are seeing predictions for further interest rate rises for 2023. The market is predicting a rise to 4% in early 2023. 

For mortgages that means that we likely see a jump of fixed rate interest offers to 6%.  

The question, therefore, remains the same as last year. It’s not a case of if the interest rates will increase it’s when will they increase. 

With regard to availability, companies lend money is to make money from the loan. They are not going to stop lending money; they will just be influenced by the current market in how they do it. 

This is why it’s always important to talk to someone. They have knowledge of the market and can tell you what is available and find what the right deal is for you. 

Are house prices going up or down in the 2023 housing market?

What are 2023 housing market prices likely to be?

Rightmove forecasts that prices will drop by an overall average of 2% next year as a multi-speed hyper-local market emerges, with some locations, property types and sectors faring much better than others.

However, Savills are predicting double-digit price falls for the coming year.

Whichever way you turn, or whoever’s predictions you follow it’s clear that there is a potential price drop on the horizon. 

What does that mean for you?

What we have to remember is that post-pandemic we saw the demand for houses increase exponentially. What we are seeing now is things reducing to a stable pre-pandemic level.  

When should I look to buy and get a mortgage?

We predict that the market will settle into a more normal pre-pandemic level of activity as 2023 progresses.

However, let’s remember that the seasonally adjusted estimate of UK residential transactions in October 2022 is 108,480, 38% higher than October 2021

As with our predictions for 2022, I don’t see anything suggesting there would be an advantage in waiting until later in 2023. 

Take advice on your situation though and, as always, put everything in perspective before you decide.

Current offers are not likely to be withdrawn. If your application is advanced enough that you have had an offer from a lender it is very unlikely that it will be taken away from you. 

Don’t sit and wait for changes because they may not come, or they may make things worse. It’s a real gamble to base a decision on ‘what could be next’ rather than ‘what is real now’. 

The current rate is certain; what it will be next week is not. The current deals are available now and may not be tomorrow. Of course, there is a chance that the rate may drop, but that is always the case. 

At the end of the day, there are still deals to be had, the money for mortgages is still there, and the housing market is still viable.

Our expert mortgage advisors have helped many people in find and get their mortgage secured. Depending on your circumstances we will talk you through anything you’re unsure of and recommend the best mortgage for you on the market for potential homeowners.

The wealth of experience we’ve gained over the years has meant that clients coming to The Online Mortgage Guru will always receive a high level of service if it can be done we will gladly do it for you.

Our advisors are available for callbacks to suit you.

Contact us at Online Mortgage Guru on 0345 3669799 or email us via and we will put you in touch with a suitable specialist to handle your enquiry.  

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