House prices to drop 2% in 2023: Rightmove

At the end of 2022, the average asking price for a home in Great Britain was 5.6% higher than 2021, and 19.7% higher than 2019.

Related topics:  Finance News,  House prices
Rozi Jones | Editor, Barcadia Media Limited
6th January 2023
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"If we compare with December 2019, just before the pandemic started, the average asking price of a home in Great Britain has risen by a staggering 20%."

Rightmove predicts that the average asking price of new properties coming to the market will drop by 2% in 2023 "after two and a half exceptional years".

This is lower than the 5% predicted by Nationwide and 8% forecast by Halifax.

However, Rightmove believes no oversupply of available properties through forced sales will prevent more major price falls. It also predicts that "hyper-local differences" between sectors and segments of the market will become even more pronounced, with prices depending on the types of property available and the desirability and affordability of the exact location.

The property website says there will likely be a period of readjustment for both buyers and sellers at the start of the year as the market settles into its pattern. Buyer affordability is likely to be more stretched, however sellers may not be in a rush to drop prices if they don’t see much competition from other sellers in their area. 2023 may favour bold sellers who look to offset a lower offer on their current home by offering less on their onward purchase if they have made gains during the pandemic on their property and are willing to give some of these up.

Price hotspots

The data from Rightmove also reveals that Eastwood in Nottinghamshire is 2022’s property price hotspot, with average asking prices in the area jumping by 29% compared with 2021.

The average price for a home in Eastwood was £231,381 in 2022, up from £179,194 in 2021. New buyers in Eastwood with a 10% deposit face average monthly mortgage payments of £1,374, which drops to £1,115 per month for those that can afford to put down a 25% deposit.

Hulme in Greater Manchester is second on the list, where average asking prices rose by 26% from £188,454 to £238,249. Sandbanks in Poole, Dorset is third where asking prices rose by 22%.

The South East features the most price hotspots within the top 10, however the North East saw the biggest regional annual growth of 10.3% last year.

Overall, average asking prices were 5.6% higher across Great Britain at the end of 2022 than they were at the same time in 2021.

2022 winners

Price growth over the last three years, particularly since the pandemic began, has varied between regions and sectors, with Wales seeing the biggest growth in average asking prices (+27%) during this period, while London has seen the lowest (+11%).

The average asking price for a top-of-the-ladder property in Wales (five bed houses and flats as well as four bed detached houses) has increased by 30% since 2019, compared with a rise of 4% in the average first-time buyer type property in London (two-bedroom and fewer properties) in the same time period.

Even with region and sector variations, those who acted quickly in the early stages of the pandemic will be feeling the full benefit of the rise in value of homes. For those who made a big life move to the coast or countryside, they may be hoping there is no return to the days of commuting to a city office five times a week.

Tim Bannister, Rightmove’s property expert, said: “Property prices have risen exceptionally over the last three years. If we compare with December 2019, just before the pandemic started, the average asking price of a home in Great Britain has risen by a staggering 20%. To put that into context, asking prices rose just 3% in the previous three years, and we need to go all the way back to 2013 to see similar price growth. We expect average asking prices to drop by 2% next year now that the frenetic period for the market is over, and it is likely that some sellers, particularly those in locations and sectors of the market that have benefitted the most from pandemic price growth, may be willing to give up some of their gains in this calmer market in order to negotiate a successful sale.”

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