When the pandemic hit the UK and brought on a recession, the London estate market had been on a flat growth trajectory for a few years.
The cost of living issue worsened as inflation and interest rates shot through the roof. But according to forecasts for 2023, the housing market in the UK is expected to cool off, making it an excellent option for anybody looking to buy property. Soon instead of asking, “When can I become a homeowner”, you’ll be asking, “How much is my house worth?”
7 reasons why 2023 is a great year to buy property in London
Affordable House prices
According to researchers, house prices will likely fall by 10% in 2023. Houses will therefore become more affordable to many buyers looking to buy property in 2023. The trick is to keep the property until the markets recover fully, allowing the property’s value to rise over time. Therefore, buying a house is a safe investment option for 2023.
Growth in private rents
With the removal of travel restrictions, people are again travelling to the UK for work and study. Rentable properties will therefore be in high demand. Additionally, a predicted 5.1% increase in private rent growth for 2023 will be very lucrative. The increasing demand and rising rental property prices suggest that now is a good time to invest in estate and rent it out or “buy and let.”
Decreased Interest rates
Interest rates will decline in 2023, according to predictions. Hence, borrowing money today would be more advantageous than when interest rates start to climb again. Additionally, given the ongoing inflation and the prospect of further rate tightening by the central bank, it is a brilliant idea to lock in a property purchase while rates are still reasonably low.
Home loan mortgage rates were steadily rising in 2022; they are currently double what they were a year ago. However, a continuous fall in rates over the last two months has persuaded more economists that rates may level off in 2023.
Some estate professionals believe that mortgage rates have likely peaked and predict more declines before rates stabilise. Mortgage Bankers Association (MBA) said, “Long-term rates have already peaked. We expect that 30-year mortgage rates will end 2023 at 5.2%.” Thus, cheaper mortgages will help avoid forced sales from mortgage defaults and, as a result, aid the housing market.
“Banks are ready to lend“
Despite the “shock” of rising mortgage rates in the fall of 2022, according to Richard Donnell, executive director at London-based Zoopla, “banks are well-capitalized and ready to lend.” Prospective purchasers will get mortgage loans and buy homes in the coming year!
Additionally, as purchasers wait for the ideal home to become available for their preferences, there will be less urgency in the market, which might result in homes taking longer to sell and a return to the more typical time to find a buyer of roughly 60 days.
More energy-efficient homes on the market
There is an increased awareness of the need for energy-efficient or ‘green homes’ among the British population. Estate agents have observed this and are looking forward to making homes that comply with the Energy Performance Certificate A-C available to buyers.
If you’re looking to buy property in London, invest in a property with green solutions like solar panels, home insulation, energy-efficient lighting, an organic garden and sustainably sourced furniture.
Better balance between supply and demand
The pandemic years saw a crunch in the availability of the property. However, in 2023, more owners are asking for free property valuations with an intent to sell, which may indicate that new properties are about to enter the market—buyers who might have been hesitant to enter the competitive market during the pandemic years.
We are fortunately through the pandemic era, and the estate market is rebounding and stabilising. Suppose you’re looking to buy a home in 2023. In that case, you might be in luck thanks to falling house prices, rising private rents, falling interest rates, more affordable mortgages, an increase in the supply of energy-efficient homes on the market, banks’ willingness to lend, and a better balance between demand and supply. The housing market in 2023 is improving for both buyers and sellers.