Sales volumes likely to be lower in 2023 as affordability becomes more challenging
In this quick speed read, we look ahead to the challenges the property market faces in 2023
- With rising interest rates and more challenging affordability (especially for first-time buyers), sales volumes will likely slow in 2023.
- Uncertainty has an impact on housing market activity; with a new Prime Minister and Chancellor there is hope that this extra layer of uncertainty clears.
- Current sales volumes are just over 1.2 million a year; a 12% fall would take them to the average level post the Global Financial Crisis.
- More significant falls are possible dependent on where interest rates end up but there are some counter indications in today’s market.
- Recent behavioural changes from Covid are still driving demand as movers look for more outside space and space to work from home.
- Family circumstances mean there is always a core level of sales activity, plus 56% of owner occupiers have no mortgage and won’t be affected by interest rate rises.
- Source Dataloft, HMRC