Forecast For The New year
Welcome back to the final house market report of 2022. This year has been fraught with many changes and challenges, and the economic headwinds that were predicted at this time last year have certainly made their effects felt. However, the house price growth decline that was predicted in response to these economic challenges is not as pronounced as expected.
House price growth currently sits at 7.8%. This was predicted to fall to 3% growth by this time of the year. The gulf between what was predicted and the actual market movements have been attributed to enduring buyer demand. This demand is said to be strongly linked to pandemic-related reassessments, such as the desire for more space.
House Price Growth Going Forward
House price growth has now begun to quickly decline, however. And in comparison to the same time last year, sales volumes are down -28%.
Demand is also in decline, with a dip of -44% since the mini-budget.
These conditions are starting to affect the decision-making of vendors, with 25% of homes experiencing any level of price reduction. Over one in ten homes for sale, have recorded a reduction of over 5%.
Compared to 5-year averages, however, though house price growth is slowing, there are yet to be signs of house prices falling this quarter.
What About 2023?
Throughout 2023, UK house price growth will be heading towards 0% (compared to five-year averages).
Some have proposed that the average house price growth could move into negative territory, but considering how much growth has defied expectations this year – despite significant economic headwinds – I believe this is unlikely.
Still, house price falls of up to 5% are expected over the course of 2023.
Once there is enough data for 2023 to re-evaluate the state of the market, we will be back with another market report. Until then, we here at EO are wishing you a fantastic Holiday break.
Luiz De Souza