Real Estate

Property Investment Predictions For 2023

The property market in the UK has been rapidly increasing since the start of the pandemic, and property investments have been providing very positive returns.

The market's success has created a pathway for Web3 applications to be used within the property market, and we will see this trend continue into the New Year. However, as the cost of living crisis and recession continue to loom over the 2023 horizon, house prices are expected to drop over the next couple of years.

Although media outlets have been talking about a housing market crash, the UK market has seen positive growth over the last year. In December 2021, the average house price was £275,000; since then, house prices have increased by 6.64% to £294,559. The house price increase contrasts with the current Bank of England Inflation rate of 10.7%, which is soaring. But the inflation rate is expected to drop over the next year or so to a target of 2%.

As a result of the drop in inflation prices, we should see a lessening of the current market progression, and we are already seeing a slowness in the market due to the Bank of England increasing the base rate by times. The current base rate sits at 3.5%, but several property experts have predicted different base rates over the next few years.

The Property Buying Company believes the base rate will rise by 1% by 2023 summer, remaining at 4.5% until the start of 2024, when the rate will drop back to 3.5%. Capital Economics predicts the base rate to increase by 1.5% to 5% next year before falling to 3.25% in 2024. Competitor, Savills, believes the base rate to rise by 0.5% in 2023, remaining at 4% until 2024 before falling back down.

Regarding property market trends for 2023, Zoopla believes that the once well-known "moving to the countryside" trend is beginning to fade as, since the pandemic surge, the number of homes sold in the countryside is decreasing dramatically.

Due to the cost of living crisis, according to RICS, many homeowners will struggle over the next year to make mortgage payments, increasing the rate of repossessions.

We will continue to see people trying to find affordable housing with affordable mortgages and an increase in the number of people looking for rent-to-live properties. Landlords should see an intake of potential tenants and an increase in yields as people choose to rent over owning.

As many industries begin to look to the Metaverse and the capabilities of business in the Web 3 space, we can expect a move for the property market & its property investors.

Although the UK property market has been slower to draw off picking up Web3 applications, we can expect many property experts to start exploring the space in 2023. Be it through AR or VR property viewings, blockchain-based smart contracts, secure and transparent property listing services or more accessible property investment payments, especially when there are multiple buyers.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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