January Property Market Update

National Average Asking Price 

Month

Avg. Asking Price 

Monthly Change 

Annual Change 

December 2022

£359,137

-2.1%

+5.6%

November 2022

£366,999

-1.1%

+7.2%

National Average Asking Price

Buyer Type 

December 2022

November 2022 

Monthly Change 

First Time Buyers 

£221,695

£223,770

-0.9%

Second Moves 

£331,836

£338,797

-2.1%

Higher prices 

£648,204

3668,306

-3.0%

• Average price of property coming to market drops by 2.1% (-£7,862) this month, a bigger dip than usual at this time of year as some determined sellers price aggressively to tempt hesitant buyers: 

• 2022 ends with new seller asking prices 5.6% higher than a year ago, versus 6.3% annual growth in 2021. 

• Rightmove forecasts that prices will drop by an overall average of 2% next year as a multispeed hyper-local market emerges, with some locations, property types and sectors faring much better than others. 

• The number of views of homes for sale on Rightmove is up 11% compared to this time last year, a sign that there are many potential movers who are monitoring the market in detail and weighing up their options: 

• As mortgage rates settle down, buyer demand over the past two weeks is 4% up on the same period in 2019. 

• We predict that the market will settle into a more normal pre-pandemic level of activity as 2023 progresses. 

Tim Bannister, Rightmove’s Director of Property Data comments: 

“Though we would always expect prices to drop in December, as motivated sellers try to capture the attention of a buyer before Christmas with a competitive price, this monthly dip is the largest we’ve seen for four years. It‘s an understandable short-term reaction to the economic turmoil and unexpectedly rapid mortgage rate rises and reduction in availability of mortgage products that we saw in late September and October, before things began to settle down. Despite this we end the year with average asking price growth of 5.6%, which is only slightly lower than the 6.3% last year.” 

Economic headwinds including rapidly rising mortgage costs mean that some would-be buyers may have paused their plans for the foreseeable future. However, over the past two weeks the number of people enquiring to estate agents is up 4% on the same period in 2019, and there are also signs that some discretionary buyers, who are still able to move, are using the space between now and the New Year to weigh up their options. Before sending an enquiry, future buyers need to consider what they could purchase, and the number of views of homes for sale on Rightmove is up 11% on last year. This indicates that there are many ready-to-go buyers, monitoring and waiting for a calmer market in 2023 after an uncertain last few months of the year. 

Information sourced from Rightmove. 

UK Housing Market Slowing Down? 

• Average house price fell by -2.3% in November (vs. -0.4% in October). 

• Annual rate of growth dropped to +4.7% (from +8.2%). 

• A typical UK property now costs £293,835. 

• Rate of annual growth slowed in all but one region (the North East) during November. 

Kim Kinnaird, Halifax Mortgages Director comments: 

“When thinking about the future for house prices, it is important to remember the context of the last few years, when we witnessed some of the biggest house price increases the market has ever seen. Property prices are up more than £12,000 compared to this time last year, and well above pre-pandemic levels (+£46,403 vs March 2020). “The market may now be going through a process of normalisation. While some important factors like the limited supply of properties for sale will remain, the trajectory of mortgage rates, the robustness of household finances in the face of the rising cost of living, and how the economy – and more specifically the labour market – performs will be key in determining house prices changes in 2023.” 

Housing Activity Key Facts 

• HMRC monthly property transaction data shows UK home sales increased in October 2022. UK seasonally adjusted (SA) residential transactions in October 2022 were 108,480 – up by 2.3% from September’s figure of 106,040 (down 3.1% on a non-SA basis). Quarterly SA transactions (August-October 2022) were approximately 2.3% higher than the preceding three months (May 2022 - July 2022). Year-on-year SA transactions were 38.0% higher than October 2021 (29.1% higher on a non-SA basis). (Source: HMRC). 

• Latest Bank of England figures show the number of mortgages approved to finance house purchases decreased in October 2022, by 10.6% to 58,977. Year-on-year the October figure was 15.1% below October 2021. (Source: Bank of England, seasonally-adjusted figures). 

• The latest RICS Residential Market Survey in August showed a continued downward trend in demand and sales. The net balance score for new buying enquiries was -39%, compared to -26% previously, the fourth consecutive month in negative territory. Agreed sales have a net balance of -22% (-13% previously) and new instructions returned a net balance score of -15% (previously -6%). (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report). 

 Inflation and interest rates 

• Inflation rates have increased in Australia, Canada, Denmark, India, Mexico, Norway, Saudi Arabia, Switzerland, UK and USA. 

• The current inflation rate in the UK is 10.7% with a target of 2%.

• The current base rate in the UK is 3.5%.

• The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 9.3% in the 12 months to November 2022, down from 9.6% in October. 

• The largest upward contributions to the annual CPIH inflation rate in November 2022 came from housing and household services (principally from electricity, gas, and other fuels), and food and non-alcoholic beverages. 

• The largest downward contribution to the change in both the CPIH and CPI annual inflation rates between October and November 2022 came from transport, particularly motor fuels, with rising prices in restaurants, cafes and pubs making the largest, partially offsetting, upward contribution.

Sourced from the Office of National Statistics 

Property Demand (predictions based off of current statistics) 

• Over the last two years the property market's main trend has been a focus on “renting for space” due to the pandemic but as the pandemic is moving into our rear view mirror this trend is also following suit with an emerging trend of renting for affordability. Affordability seems to be the focus of the rental market in January 2023 with renters looking for energy efficient properties with high EPCs that allow for cost saving of the renters. 

• Tenant searches for bills are up 57 per cent compared with this time last year. The significant increase in searches reflects greater concern from tenants about their energy bills, and increased interest in properties that can include bills within the monthly rent. 

• As property rental prices continue to rise there will be a continued demand for shared accommodation and HMOs. This demand could even spill out into fringe areas such as villages and towns neighbouring larger cities with good commuter links.