This year has been another crazy year for the UK property market, following 2021’s pandemic property market boom. Property industry experts from across the sector have shared their thoughts on what’s to come in 2023.

According to experts, the property market continued to see robust and a consistent level of activity throughout most of 2022, with the latest sold price data from the Land Registry showing that house prices currently remain 9.5 percent higher than they were last year. However, the latest house price index from Halifax has unveiled that house prices fell by 2.3 percent between November and December showing the “first signs” that the market is starting to cool.

Marc von Grundherr, Director of London lettings and estate agent, Benham and Reeves, commented: “A further increase to interest rates will certainly spur a continued cooling in current property values but it’s extremely unlikely we will see the deep freeze that many may lead us to believe.

At most, we can expect a five percent drop during the first six months of the year, at which point stability will return and house prices will start to level out. 

“As for the rental market, we’ve seen values climb consistently higher over the last year and with a shortage of stock continuing to be a burning issue, we can expect the cost of renting to climb by a further 10 percent in 2023.”

While the focus is often on house prices, one expert said it is the transactions these prices are agreed on that fuel the furnace of the UK property market.

James Forrester, Managing Director of Birmingham estate and lettings agent, Barrows and Forrester, said: “In 2021, we saw huge peaks of up to 165,000 homes sold per month and while this has subsided in 2022, we’ve seen a far more settled, consistent levels of homes sold on a monthly basis, between 60,000 to 75,000 per month.”

The property expert expects this consistency to remain in 2023, and a return to “normality” is currently unfolding with respect to house prices.

James added: “While buyers and sellers continue to transact, it’s probably a little premature to predict the final days of the UK property market. We also expect rental values to remain robust, climbing by between five to eight percent.

While there is no need to prepare for a house price crash, one expert said the UK can “confidently expect” property values to “decline” slightly over the next year.

Managing Director of House Buyer Bureau, Chris Hodgkinson, said he has already started to see a weakening of the market due to combined factors including high inflation and lower wage growth.

Rising interest rates have also put massive pressure on household budgets. The expert explained: “As a result, those entering the market to sell will still be able to find a buyer due to the shortage of stock available.

“But while this continued imbalance between supply and demand will allow them to sell, they will no longer hold the power where negotiations are concerned and will find the hefty premiums secured during the pandemic market boom are no longer on the table.”