According to a statement from the Centre for Economic and Business Research, house prices are expected to fall in 2023, giving hope to potential buyers who are being priced out by inflated figures. But potential bad news for people looking to sell!
The CEBR have specifically predicted that house prices are expected to fall by 4.5% on average, with a peak annual contraction of 6.2% expected in Q3 2023. They have attributed this primarily to a cost-of-living increase, rising mortgage rates, a subsequent recession, and predicted high levels of unemployment as a result.
But, despite what it may look like for people looking to buy, falling property prices may not in fact make it easier for struggling buyers to purchase. Interest rates still remain high, meaning that a lot of people will still be priced out by high monthly mortgage payments that they can’t afford. The general cost of living is still going up, meaning that people have fewer and fewer disposable income. And when recession hits, there will be job losses or salary decreases so the ability to purchase will significantly reduce for some.
For people looking to sell, it’s not all doom and gloom as property prices are very high right now, but a small decrease in prices will still leave your property value higher than average. If you are put off by the idea of your property value decreasing, you may want to keep hold of the property for a while and secure a new fixed mortgage product or make some other changes to your current deal until a time where properties may go up again.
Concerned about a possible housing market crash if people are still put off by declining property prices, the CEBR has said that they may seriously consider re-instating the stamp duty holiday to try and incentivise buyers and sellers back into the market.
If you or anyone you know is considering purchasing a property in the next few month, or are interested in keeping your property but re-evaluating your current mortgage deal. Please give our friendly and knowledgeable advisor team a call today to see how we can help.