London Property Market Report: January 2023

UK Property Market Report 2023

 London Property Market Performance

Market researches suggest that the third week of 2023 saw the fourth-highest number of offers accepted in London during a single week in January in the past decade.

This trend reflects that the property demand is still strong, including new build homes in London. The number of new forthcoming buyers registering in the first three weeks of 2023 was 6% higher than at the same time in 2020, which was a year of high demand.

As for the stock levels, the number of new sales instructions also hit high thresholds in January 2023, meaning that many sellers are eager to sell their homes. As a result, the predicted double-digit price falls are unlikely, given the recent market performance.

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Housing Market Takeaways – January 2023

  • Average home value growth stalled in Q4 2022, pushing the annual inflation to 6.5% from 8.3%.
  • Most UK areas documented marginal home value drops in Q4 2022, following the mini-budget and spiked mortgage rates.
  • Current demand levels are in line with 2018 and are 10% higher than in 2019, just before the pandemic hit.
  • Q1 2023 saw a slowly building market momentum, with buyers opting for smaller flats than spacious houses in response to high borrowing costs.
  • Demand will likely rise in the coming month as mortgage rates readjust and fall while prospective buyers realise that significant price drops are not on the cards.

Although the market has started the year positively, some stipulation remains. Firstly, we should wait to see if current trends were short-lived bounce-back or indicate further growth.

As the outlook becomes clearer in Spring 2023, many predict demand to pick up further. A lot will depend on the labour market and inflation, as well as the possible increases to base rates.

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