You are in demand if you are looking to sell a home that represents good value. At this time, buyers are looking for homes that offer more value for their money.
There has been a 16% increase in demand for homes since spring 2019 and the highest level since October 2022
The most affordable areas, such as Scotland, Wales, the North East of England, and London, have above average buyer demand as well
It is likely that mortgage rates will remain around 4% for most of 2023 – and could even move lower towards year’s end
Though prices are adjusting lower, most homeowners selling their home will still make more than they did 1-2 years ago
We expect 500,000 homes to be sold in the first half of 2023, up 4% year on year. There have been 11% more contracts signed than in spring 2019 – and they continue to climb.
In October 2022, housing prices were down 1%, but the housing market has fared much better than many predicted, and sales are starting to increase.
The number of homes for sale has increased by 65% since this time last year.
Consequently, buyers have more options, and we expect at least one million homes to be sold in 2023.
More affordable homes appeal to buyers with limited spending power.
Consequently, homes in Scotland, Wales, the North East of England, and London are in high demand.
In addition, we expect inner London flats to see a resurgence in popularity this year because of price stagnation since 2016.
It’s clear that buyers are currently more interested in homes at the more affordable end of the market, with sales at the lower end of the market increasing 5% and sales at the top decreasing 4% across all regions and countries of the UK.
Among the top 20% of sales in the London market, only the top end is bucking the national trend.
In areas that saw big gains during the pandemic, like the South West, South East, and Midlands, you may find it takes longer to sell, since these homes need larger mortgages.
A 4% mortgage rate currently reduces buyers’ buying power by 20%, so they are searching for cheaper properties.
Sellers are cutting their asking prices by how much?
A modest downward adjustment is being made by sellers to their asking prices in order to match buyer expectations.
Currently, the average seller discount is 4%, or £14,000.
Sellers can make these adjustments due to the scale of price gains over the pandemic (where the average home value increased by £42,000).
What is the average time it takes to sell a home in March 2023?
Compared to spring 2022, when we were in a hot housing market, it now takes the average home 15 days longer to sell.
The majority of areas are still selling homes faster than they did in spring 2019.
In Scotland, the average sales period is 28 days (when a survey and valuation have been done), while in London, the average is 44 days.
What motivates buyers to move in 2023?
There are more and more office workers who work from home.
For many, that freedom still opens up the buying landscape, enabling them to find a better deal elsewhere.
A spike in retirement due to the pandemic is also contributing to home moves.
In the meantime, rising rents are forcing some renters to purchase their first homes.
In addition, cost-of-living pressures will lead some movers to down-trade from expensive to more affordable homes.
What is the housing market looking like for the remainder of 2023?
All regions and countries in the UK are experiencing soft repricing with modest price declines quarter-over-quarter.
There’s no indication that house prices or transaction volumes will suddenly plummet, but buyers and sellers continue to strike deals.
Markets with the lowest prices will continue to attract demand and see sales levels above average.
Sellers should make sure their pricing aligns with buyers’ expectations. You cannot afford to over-price your home if you are serious about moving.
The interest rate on mortgages will remain around 4% for much of 2023, and could go lower by the end of the year.