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  1. Blog
  2. Property Market Update: January 2023
Property news
10 February 2023

Property Market Update: January 2023

Sam Edwards
Senior Writer & Researcher
Person reading newspaper at modern cafe table with a cappuccino and slice of cake

Table of contents

  1. 1. Asking prices rise for properties fresh to market
  2. 2. House prices appear stable after series of falls
  3. 3. Fixed-rate mortgages fall despite increase to BOE base rate
  4. 4. Summary: Riding for a fall
  5. 5. Words of advice to homeowners and homesellers

Welcome to the first GetAgent Property Market Update of the New Year! We’ve gathered insights from experts across the UK to bring you the latest from January.

So, what's been happening in the world of property? Last month was a mixed bag. Rightmove's latest report shows an increase in asking prices, which is a positive sign for sellers, and a good indication that the market has started the year with a bang, just like previous years. House prices have remained stable with Halifax reporting no change since December, but Nationwide showing a slight decrease of 0.6%.

But here's where it gets interesting. On February 2nd, the Bank of England decided to raise the base rate to 4%, and there's speculation that it could reach as high as 5% by the end of the year. While some fixed-rate lenders seem unfazed, this could spell some trouble for those with variable-rate mortgages.

So, buckle up and let's dive into asking prices and what they mean for homesellers.

Asking prices rise for properties fresh to market

Property portal giant, Rightmove, shows us that the market is bouncing back in their latest January 2023 report. Average asking prices rose by a healthy 0.9% (+£3301) after two months of decline, marking the biggest increase since 2020. This is a clear indication that sellers are eager to test the waters and see what the market has in store for them this year.

The 5th of January also saw a record number of homeowners requesting valuations, signalling an influx of would-be sellers. This is a great early sign of market strength and indicates that there's going to be plenty of healthy competition in the months to come.

According to Tim Bannister, Rightmove's Director of Property Science, ‘The numbers certainly suggest that activity has bounced back after Christmas…We expect that the full effect of affordability constraints and last year’s mortgage rate rises will hold back some segments of the market in the first half of the year, but our leading market indicators may start to identify some green shoots of growth that will go on to strengthen in the second half of 2023.’

House prices appear stable after series of falls

Every month, banks release updates to their house price indexes, with the Land Registry lagging a few months behind. Two of the most respected sources in this field are Nationwide and Halifax.

Nationwide's report for January 2023 shows that the average UK property was valued at £258,297, a small decrease of 0.6% from December's figure of £262,068. Despite this monthly decrease, there is still a positive annual growth of 1.1% - but this is still much less than the 11.2% annual growth recorded in January 2022.

Halifax's report paints a slightly different picture, with the average UK property estimated at £281,684. The bank comments that the figure is virtually identical to their December report, marking an improvement from the significant price drops seen in previous months (-1.3% in December and -2.4% in November). According to Halifax, annual growth has slowed to 1.9%, which is the lowest they've recorded in the last three years.

While average house prices appear to be stable, some experts warn that a decline is imminent. The latest report from RICS (Royal Institute of Chartered Surveyors) highlights a decrease in sold prices across the country, with over 47% of surveyors observing sharp declines in the Midlands and the South East.

Fixed-rate mortgages fall despite increase to BOE base rate

Mortgage rates have been in the spotlight lately, with the Bank of England's recent announcement to raise its base rate to 4%. While this could be unwelcome news for homeowners with variable rate mortgages, it's a different story for those in the market for a fixed rate deal.

Despite the rise in base rate, monthly payments for first-time buyers are shrinking, with some deals even being offered below 5%. Rightmove reports that two-year fixed rate packages have fallen by 0.35%, and five-year packages have even fallen by 0.43%.

Some experts have cited this as a positive outlook for the year ahead. Robert Gardner, Chief Economist at Nationwide, comments that "there are some encouraging signs that mortgage rates are normalising, but it's too early to tell whether activity in the housing market has started to recover."

It's a different story for homeowners with variable rate mortgages however. As these rates are linked to the Bank of England's base rate, their monthly repayments will also rise when the base rate does. According to Zoopla, average monthly mortgage costs for these homeowners have increased by £430 since the BofE started to raise interest rates from 0.1% in December 2021.

Summary: Riding for a fall

Although we’ve seen some stability across average house prices, there are concerns about a potential slowdown in the market. While borrowing costs have fallen since the last months of 2022, they’re still much higher than what we’ve enjoyed over the last decade. The strain on household incomes and the rising cost of living crisis, add to the challenges of current market conditions, which are far from the strong growth seen in past years.

On a positive note, there are signs that inflation has reached its peak and the expected recession may be milder than previously thought. It's a mixed picture, but it's important to keep a watchful eye on how these factors will play out in the coming months.

Words of advice to homeowners and homesellers

Our advice to homeowners is to carefully consider your options. Take the time to assess your financial situation and understand the value of your property. Knowing the worth of your home is especially important during this time of economic uncertainty. You can use a free online calculator like GetAgent's - or even better, request a valuation from a real estate agent.

For homesellers, having access to accurate data is crucial in managing your sale. With the premonition of a hyper-local market seeming ever more a reality, it’s imperative that you choose the right marketer and negotiator to handle your property sale. Setting the right price from the start can mitigate the need for price reductions later and increase your chances of achieving a successful sale.

Like car insurance, phone contracts, and other services, estate agents should be compared using hard, impartial data. GetAgent's free Agent Comparison Tool compares the best in your area based on factors like:

  • Their experience in selling properties like yours
  • Their ability to achieve asking prices
  • Their speed in selling properties

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