January 2023
JANUARY HOUSING MARKET OVERVIEW
OVERVIEW
A weaker economy, rising interest rates and high inflation have continued to impact buyers’ confidence. Market indicators are already showing a slowdown in housing market activity. Buyer demand in December 2022 was down 50% on last year (Zoopla External Link), mortgage approvals fell 20% between October and November 2022, with the lowest number of approvals since June 2020 (Bank of England External Link), and house prices are falling. According to both the Nationwide External Link and Halifax External Link house price indices, prices have experienced monthly declines for four consecutive months.
Buyers’ confidence is expected to remain subdued throughout 2023, with a continued slowdown in housing market activity anticipated.
MORTGAGE INTEREST RATES
The residential market is extremely sensitive to interest rate rises and as a result, we have seen mortgage interest rates increase throughout 2022. For example, a 2-year fixed mortgage rate on a 90% LTV was 1.95% in January 2022, peaking at 6.25% in November 2022. Rates improved in December 2022, declining to 5.96% (Bank of England).
MORTGAGE APPROVALS
In November 2022, 46,075 mortgages were approved, the lowest number of approvals since June 2020. This is 20.4% below last month and 29.7% below the pre-pandemic average (November 2017-2019 average).
SALES
In An estimated 114,200 sales were completed in November 2022. Sales were 4.3% above last month and 2.9% above pre-pandemic levels (November 2017-2019 average). These sales will mostly reflect transactions agreed several months ago (HMRC).
HOUSE PRICES
Nationwide reported annual house price growth of 2.8% in December 2022, a slowdown from November 2022 (4.4%). Prices fell by 0.1% month on month, the fourth consecutive monthly decline. Halifax also reported monthly declines for the fourth consecutive month.