Rightmove have this week announced their annual House Price Forecast - for 2023.
In it, they explain the market forces from a year ago as we entered 2022, with ongoing 'record-breaking house price increases, huge levels of demand from buyers, and homes selling more quickly than ever before' and this was certainly the case here in Penarth. This growth, fuelled by extremely high demand and a relative lack of supply continued for the large part of this year, through spring, summer and into the autumn.
As we've reached the end of the year, the market began to fall back towards a more normal, pre-pandemic level and this has manifested itself in lower levels of activity and demand. Supply remains low. At the same time, as Rightmove explain 'interest rates started to increase, and some buyers put their moving plans on hold as mortgage rates also climbed.'
RIGHTMOVE'S THOUGHTS ON 2023
This year we saw asking prices in Great Britain rise by 5.6%, to an average of £359,137. This was almost £17,000 higher than in 2021, when prices increased by 6.3%.
In 2023, we’re forecasting that average asking prices will drop by 2%, which means prices will still remain higher than they were after the incredibly busy home-moving period of 2021.
One of the main drivers of the house price growth we’ve seen over the past two years has been the imbalance of supply and demand, with far more people looking to move than there were homes available for sale. And in a more settled housing market, buyers will have the time and space to make sure they find the right home for them. As a result of this, we anticipate the time it takes to sell a home increasing to what we’d expect to see in a more ‘normal’ housing market, of around 60 days.
Our property expert, Tim Bannister, says: “After two and a half years of frenetic activity, it’s easy to forget that having multiple bidders immediately lining up to buy your home was the exception rather than the norm in pre-pandemic years, and there will be a period of readjustment for home-movers as properties take longer to find the right buyer.”
WHAT DOES THIS MEAN FOR PENARTH, SULLY AND LLANDOUGH?
All of the data and opinion above is based on national numbers from across the UK, and clearly some areas will weather these economically and politically turbulent times better than others. We've talked before about the strength and popularity of Penarth, Sully, Llandough and ultimately the 'Greater Cardiff' / Cardiff and the Vale of Glamorgan area. As was seen following the 'credit crunch' years from 2008 to 2010, our area faired better than others, reduce in value by a smaller amount and recovered more quickly. These are a totally different set of circumstances but there are no reasons to suggest that it won't be the same this time around. As Rightmove point out, 'price growth in an area could vary from street to street depending on the types of property available, the desirability of the location, and buyer affordability' and this is something that we have definitely seen in reverse, during the growth period.
DO RIGHTMOVE FEEL PEOPLE ARE LOOKING TO MOVE?
(From Rightmove) After the uncertainty brought about by interest rate rises and high inflation, we’re seeing signs that some buyers are ready to get started with their home moves as we head into the New Year. This month, views of homes for sale on Rightmove are up 11% when compared to the same period in 2021, suggesting that 2023 moves are on the cards for those who are able to do so.
Our property expert, Tim Bannister, says: “We’re heading towards a more even balance between supply and demand next year, but we don’t expect more significant price falls in 2023. This is reflected in our prediction of a relatively modest average fall of 2% next year.”