House Price Index - March 2023
“Buyers and sellers continue to agree sales, which is an important and positive indicator for the market. Sellers have to be realistic but it’s clear that prices do not need to adjust lower to support transaction volumes in 2023”
The sales market continues to see a return of buyers with more new sales being agreed. In recent weeks, the demand for homes reached its highest level since last October when the fallout of the mini-budget hit activity. Demand is 16% higher than this time in 2019.
All areas are registering an improvement in market conditions with some areas doing better than others. We continue to register above average demand for housing in the most affordable areas led by Scotland, Wales, the North East of England and London.
Demand is weaker in regions where prices jumped the most over the pandemic and where prices are higher than the national average. These are markets where higher borrowing costs impact buyer power, covering the southern half of England and the Midlands.
Executive summary
The housing market continues to experience a soft repricing
Annual inflation slows to 4.1%, prices 1% lower than in October 2022
Market conditions at the end of Q1 are better than many had expected - buyers and sellers are striking deals at an increasing rate
We expect 500,000 sales completions in H1 2023 meaning we are on track for 1m sales, potentially even higher in 2023
Sales activity is being supported by 65% more homes for sale compared to March 2022 and falling mortgage rates
We find a shift in sales towards markets with better value for money and expect the inner London flats market to see more activity in 2023
High rental inflation will continue to support first-time buyer demand
