During the economic uncertainty of 2022, many experts predicted that the UK housing market would experience a significant drop in house prices, fewer sales and even a potential housing market crash in 2023.
Given the rapid increase in the cost of living, soaring interest rates and increased mortgage repayments, many estate agents were also concerned that the usual ‘spring rush’ wouldn’t happen and that the UK housing market would struggle more than in previous years.
Here at Cobb Farr, we remained optimistic, understanding that the housing market in Bath, Bradford-on-Avon, Wiltshire and Somerset continually proves more resilient than in other parts of the country.
Now that spring is over, we wanted to look back over the year so far, share our insights into how the UK and local housing markets performed and explain why realistic pricing is key if you want to sell your home in 2023.
What is the ‘spring rush’ in the housing market?
Spring has traditionally been one of the best times to buy or sell a home.
According to Rightmove, there are more homes listed for sale, more buyers starting their search and competition at its highest compared to any other time of the year between March and May.
This is partly because many families and individuals are keen to move before the summer arrives so they can enjoy their gardens and outdoor spaces or relocate before the six-week school holidays begin.
When the sun is shining, the evenings are growing longer and gardens are in full bloom, properties look more attractive and it’s easier to schedule an early evening property viewing than during the colder months.
The retail and hospitality trades have long known that when the sap is rising, so are shoppers. Spring is in the air and after the gloomy winter months it just feels right to go out more and be more confident about major purchases and moves that may have been on hold.
For these reasons, buyer enquiries are usually highest during March, closely followed by April and May.
What did the experts predict for spring 2023?
Experts predicted that the UK housing market would cool significantly in 2023 amid soaring inflation and higher interest rates.
According to Halifax, the average house price dropped by 2.3% between October and November of 2022, a trend they expected to worsen. Although the mini-budget in September 2022 caused mortgage rates to go through the roof and then drop slightly, they were expected to remain high.
These combined factors looked set to push the UK economy into a recession, slow the traditional ‘spring rush’ in the housing market, reduce buyer confidence and cause house prices to fall even more.
As mentioned previously, we were more optimistic at Cobb Farr. We expected to see a bit of slowdown but with demand still outstripping supply and mortgage rates beginning to steady, we were confident that spring would still be a buoyant period for us.
How did the UK and local housing market perform in Spring 2023?
Confidence is improving
Concerned that they’d gain less return on their property investment, many prospective buyers delayed putting their homes on the market in 2022, leading to a shortage of homes for sale and pushing up prices.
An increase in confidence has meant that the UK housing market has seen a significant shift in spring 2023, with approximately 65% more homes for sale than last year.
However, as we predicted, demand continues to outstrip supply in the Bath, Bradford-on-Avon, Wiltshire and Somerset areas. This is because these beautiful parts of the country remain highly attractive for those looking for a better work-life balance, more outdoor space, an easier commute, and better schools for their children.
We’ve also seen a significant increase in confidence in the local area with more buyers and sellers visiting our Bath and Bradford offices and exchanging contracts. We’ve heard a few concerns about interest rates and slightly more caution, but on the whole, we continue to be extremely busy.
The rental market also continues to be buoyant in the local area. We have seen a lot of movement on flats and apartments, with investor being very active during the spring period.
For these reasons, we recommend that you start your property search quickly if you want to buy a new property or relocate to any of these areas.
House prices have fallen as predicted
Many experts suggested that UK house prices would collapse in 2023 because of the uncertain state of the economy. Although September’s mini-budget caused a 20% drop, estimates ranged between a 5-8% decrease.
According to Rightmove, prospective home buyers in the UK have also been asking for price reductions that average around 6% of the total asking price. Many of these are accepted by sellers who are keen to move.
Although the growth of house prices slowed during 2022 in the Bath and Bradford area, they continued to increase overall, leading us to predict that the same would continue during 2023. Our predictions for spring 2023 have come true as we continue to see a healthy housing market in the area.
We’ve also noticed that people are becoming more realistic with their asking prices and therefore are selling faster than in previous years. This time last year, houses were attracting a lot of viewings, but properties were staying on the market for longer because of the inflated asking price. This realism has been key to quicker sales in the local area, and in a sensitive market, it has proved to be a sensible choice if you are keen to make that move.
Mortgage rates are steadying
There’s some good news when it comes to UK mortgage rates. At the time of writing they have been falling since the mini budget of September 2022 although they still remain more expensive than in previous years and the Bank of England is currently talking of them going up again.
Although we expect mortgage rates to remain around this level, there are still many reasonable fixed-rate mortgages available and recent Bank of England data suggests a significant rise in the number of mortgage approvals.
The UK housing market exceeded expectations for Spring 2023 with a significant number of enquiries, viewings, and sales, despite the turbulence of 2022. In Bath, Bradford-on-Avon, Wiltshire and Somerset, the market remains strong and shows good signs of recovery.
Experience has shown that if you can become more realistic about your asking price, look for the best fixed-rate mortgage deal and make the most of this time of year, you too could buy or sell your ideal property in the area.
Contact us today if you’d like expert help buying or selling your home in Bath, Bradford on Avon, Wiltshire, or Somerset. We would be delighted to guide you.