What will house prices do in 2023?
For decades, London has continued to perform well as a premium destination for both UK and international investors with 2023 not expected to be an exception. The city’s cultural diversity, its world-renowned educational institutions, and its strong business environment attract investors and businesses and consumers to the city. If you are an overseas investor, click here to download our Foreign National and Expat Guide.
2023 will also bring the crowning of King Charles III, attracting visitors from around the world and is the prime reason the NY times predicted London to be the most visited city in the world.
What does this mean for property prices? With inflation reducing for the second month in a row and unpredicted (marginal) growth within the economy, the lows of October/November 2022 seem like a distant memory for the UK as a whole. This resilience is the reason why London (and the UK) has long been a solid and safe long-term investment for HNW individuals around the globe, with property being their go to asset.
In 2023, it is expected that UK property prices will remain relatively flat compared to 2022. Although the exact figures are difficult to predict, according to Forbes, House prices in the UK dropped by 1.5% in December. This marks the fifth consecutive month of decline, and experts have forecast that prices could fall by as much as 5% by the end of 2023.
However, this is following two-three years of robust UK wide property growth leading commentators to predict that this year is a strong buyer’s market due to the cooldown in demand whilst supply continues to rise.
One point that is certain – transparent and effective advice is key when finding the right financing. Get in touch with our team today for your free consultation.
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The attractiveness of the 2023 UK market for overseas buyers
- A buyer’s market, therefore plenty of room for negotiation and choice.
- The weak pound makes the UK significantly cheaper in real terms.
- Rising competitiveness in the lender market leading to mortgage rates decreasing on an almost weekly basis.
- A booming rental market.
- Specialist financing – including bridging, commercial and development – lenders are all keen to work with global investors.
- Tax advantages when using finance.
Outlook for inflation and interest rates
In September last year (2022), analysts were predicting inflation to continue to rise until March/April. However, UK inflation has reportedly peaked in late December 2022, according to the Monetary Policy Committee (MPC) of the Bank of England. Inflation has dropped again this month (January) and is expected to continue to fall this year to 6%.
This is welcome news for consumers, who have seen the cost of living rise significantly over the past year. Despite the peak in inflation, the MPC is still committed to keeping inflation at or close to its 2 per cent target in the medium to long term and expects to reach this by Q2/Q3 2024.
Interest rates are used to control and stabilise inflation. The Monetary Policy Committee (MPC) have recently stated that they are expecting the BOE base rate to rise marginally at their next meeting in February. However, this rise has already been priced in by the lenders and is the reason we are already seeing mortgage rates fall.
Investec’s prediction that the Bank of England (BOE) will be the first monetary committee to decrease the base rate in the world is another welcome sign for the UK.
What does 2023 have in store for Articus Finance?
Articus Finance saw out 2022 with another record year. We doubled the number of clients we secured financing for and saw a large increase in complex financing enquiries (bridging, development and private banks). We responded to this increase in demand, not just by adding to our brokers, but by adding to the wider staff pool to ensure the process is as simple for our clients as possible. This included adding administrative staff and adding to the client services team.
In 2023 we will continue to provide solutions for our clients with a 500+ network of lenders from high street banks to private lenders. GET IN TOUCH
