What’s Happening To The UK Property Market?

Back in 2008, the UK experienced a recession in which property prices started to fall. By 2010, property prices across the country had fallen by an average of 15%. 

Then the market started to recover and prices started soaring back up. By 2014, prices were back at pre-recession levels. By 2019, the average property had gained £50,000 in value since 2014.

Then the pandemic hit. Many people worried that this would spark a property price crash in the UK as a result of buyers pulling out and sellers holding off. But it didn’t. In fact, property prices increased by an average of 20% between 2020 and 2022.

Fast-forward to 2023. What’s happening now? Well, for the first time since 2010, it seems like property prices may be going down again. Prices fell by 3.1% in March and some experts have predicted that prices may fall by as much as 10% by the end of the year.Is this bad news? Has the UK property price bubble burst and are we headed for a crash? Or is this just a small correction?  

Why are prices going down?

Property prices are going down as a result of rising mortgage rates and a reduction in mortgage approvals. Demand for property is slowing down as a result of this. However, it’s worth noting that there is still a demand there – particularly among foreign investors.

Therefore, a property crash seems unlikely. What we are experiencing right now is simply a housing market correction. Demand will quickly pick up again and we will see property prices increasing again – if not in 2024, then certainly in 2025. 

Is now a good time to buy property?

If you’ve been thinking about getting into property investment, 2023 or 2024 could be good years to get stuck in. The market correction means brief access to cheaper properties. This could mean potential for greater returns in the future when prices go back up.

Eager first-time homeowners should also think about buying now. A 10% correction could mean a 10% lower mortgage deposit than you would have had to put down last year. Interest rates are going up, but this is likely to continue in the next few years. In other words, it’s better to buy now than later while interest rates are relatively lower. . 

Is now a good time to sell property?

Selling up in 2023 could mean settling for a lower valuation than you would have got in 2022. As a result, some sellers may want to hold off until prices go up again in the next few years.

That said, if you’re selling and thinking of buying another property, selling now could allow you to explore some of the temporarily cheaper properties on the market – and so it could all even out in terms of what you can access for the value of your home. Providing that you bought your home before 2020, there is also still a high chance you’ll have made a return on it, even if it’s not as much as you may have made last year.