The UK property market has always been shaped by changing interest rates, buyer demand, and shifting confidence. As we looked ahead to 2023, experts across the industry made their UK property market forecasts, predicting everything from price dips to continued resilience.
In this post, I revisit those predictions and share insights on what actually happened — and what we can learn from the trends that shaped the 2023 housing market.
It is that time of the year when everyone is having a go at predicting what will happen to property prices in the UK in 2023. As always, no one has a crystal ball to accurately predict how the UK property market will react and behave in 2023.
Hometrack, the company owned by property portal Zoopla, has recently published a set of data on the state of play for the UK property market.
Here is a summary of the main points highlighted:
- “buyer demand” down more than 40% compared to last year and 44% since the day of the “mini’ budget. (Hometrack measure ‘demand’ as enquiries to agents for specific properties advertised on their website)
- Inventory up compared to the summer but still 19% below the period 2017 – 2019 average.
- 25% of homes for sale since September have had an asking price reduction, with price reductions being greatest in southern England where sales activity has fallen back the most.
- Number of sales agreed down 28% compared to same period last year. New sales fell by half in the hottest markets, less in affordable areas.
What are the experts predictions?
- Five-year UK house price growth forecasts (2022-2026)
- OBR: -1.2% (approx)
- Lloyds Bank: +0.2% (base case)
- Knight Frank: +1.5%
- Savills: +6%
- JLL: +8.9%
- Strutt & Parker: +10-15% (range)
Estate agency Knight Frank forecasts prices will drop by 5% in 2023, and a further 5% in 2024.
Analysts Capital Economics predict house prices will fall by a total of 12% by mid-2024.
Natwest estimates that house prices will go down by 7% next year.
Britain’s biggest mortgage lender, Lloyds Bank Plc, revealed that it expects average house prices to fall by around 8% in 2023 – with a worst-case scenario involving a 17.9% crash (the best case is a 2.7% dip).
But the Nationwide warn that they could fall by 30%!!!! The banking giant’s base case assumption is currently that house prices will end the current five-year period (to 2026) roughly where they are now.
The UK property market forecasts for 2023 reflected uncertainty — yet also resilience. While rising mortgage rates slowed growth, demand remained steady in many regions. Looking back, it’s clear that accurate forecasting depends on understanding not just data, but also buyer sentiment and market psychology.
What’s your take? Were the 2023 forecasts accurate in your experience — or did the market surprise you?
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For more information about Domus Holmes Property Finder, please contact:
Jerome Lartaud: jerome@domusholmes.co.uk or follow Jerome on LinkedIn
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