Homeowners must accept that 2023 will become “the year of the price drop”, a property expert claims.
As Nationwide and Halifax data points to sales values falling and Rightmove figures showing a dip in asking prices, Jonathan Rolande of the National Association of Property Buyers, said the question shouldn’t be if the market drops but how far it falls.
He said: “For 12 years the market has proven doom-mongers wrong, climbing ever higher despite political strife, a pandemic, Brexit and even a European war.
“But given the current circumstances, it is becoming increasingly hard to see hope for the next year. In fact it’s even becoming tougher to remain on the fence with a ‘something will turn up’ approach.
“It now seems clear that 2023 will be the year of the property price drop. It’s not a matter of if, but when, how fast, and by how much.”
Rolande suggested the first quarter of 2023 will be crucial for the market, especially with the possibility of more interest rate rises that could push up mortgage pricing, adding: “If there is a New Year bounce, buyer and lender confidence could hold and the rate of decline will be slow.
“But if 2023 doesn’t start with a property buying spree, that confidence will be further eroded and that could well spell monthly reductions throughout the whole of next year.”
He said the impact could likely extend into the rental sector too.
Rolande said: “It is a very strange market out there at the moment. What we're seeing is a kind of perfect storm for the property market. And surprisingly, it's to do with rental and sales prices because, of course, they're very closely intertwined.
“Landlords keep an eye on property prices, not just the rent that they're receiving, but also the amount that their property value is going up or down, and actually that's where most landlords make their money.
“It's not from the £100 pounds profit a month that they might be getting on the rent. It's actually from the capital growth.
“If that starts to disappear, and not grow, or worse, be eroded even further, they're going to be quitting the market, putting the market means there's a smaller supply of property. And that will lead to an increase in rents.”