Property prices are cyclical, and will go down as well as up, however, so far in history, they have been on a general upward trend.
Currently in the UK property market ...most forecasters are saying that UK house prices are expected to fall by around 5% to 10%, as the market rebalances after years of growth, and as mortgage rate rises, inflation the and cost of living pushes prices down. Unemployment is also expected to rise to about 5.5%.
In addition, the government is actively working with mortgage lenders to avoid additional stress on borrowers, so we hopefully the number of forced sales will be relatively small and the lack of supply, combined with the strong underlying demand for homes, will ultimately insulate the market from any dramatic falls in prices.
Previously the coronavirus pandemic had fuelled a mini housing boom as flexible and home working led to an increase in sales of larger properties in more rural and idyllic settings leading to an approx. overall 23% increase and on average pushing values up £12,000 on a year ago. .
Overall 2023 to be characterised by a slower property market during which about 25% fewer properties will come on to the market and change hands compared to a ‘normal’ year. Moreover while inflation as a whole may be close to or at its peak, household energy bills are likely to rise again, putting more pressure on household budgets.
However, there is still uncertainty around this forecast and its always important to realise property prices are cyclic and one should always look at investing for the long term.