What will the UK property market look like for BTL investors in 2023: House prices, rental demand, and mortgage rates.
Forecasts for the property market in 2023 are looking positive. If you are thinking of investing in property this year then this blog will inform you of some key facts you should know about the UK Property market.
House Prices:
In 2022, asking prices for houses in Great Britain ‘rose by 5.6% to an average of £359,137’ due to high levels of demand and a shortage of supply. However, towards the end of the year asking prices began to decrease, as the market slowly returns to pre-pandemic levels.
Rightmove recently set out their property market predictions for 2023, forecasting a more settled housing market in comparison to 2022 & claiming a significant drop in prices is unlikely.
Tim Bannister, a property expert at Rightmove, suggests “We’re heading towards a more even balance between supply and demand next year, but we don’t expect a surge in forced sales which would cause a glut of properties for sale and contribute to more significant price falls in 2023.”
Rental Market:
According to Zoopla, the UK average rent in Q4 2022 was £1078, this is an annual change of +12.1%. Zoopla predicts the rental demand to slow down to +5% in 2023 as rental affordability will have a massive impact on the market.
Rental enquiries per estate agency branch are 46% above the 5-year average. (Zoopla) As demand increases, rental prices have been increasing faster in larger UK cities, with rental figures in London increasing by 17% in the last 12 months.
Mortgage Rates:
Towards the end of last year mortgage rates began to decrease & stabilise, with Zoopla predicting rates to continue decreasing at the beginning of 2023. Although, rates will not return to levels as low as the previous years before the pandemic.
The Bank of England’s base rate is now 3.50%, however, property buyers should expect higher mortgage interest rates of around 4-5% throughout this year.
If you are wondering which mortgage you need for your buy-to-let property, check out our previous blog: https://ereproperty.com/ere-insights/ere-property-blog/what-mortgage-should-you-be-getting-for-your-btl-in-2023-fixed-term-or-variable/
At ERE Property, we offer off-plan buy-to-let investment opportunities in UK hotspot areas, check out our most recent investment opportunities by clicking here.
If you have any further questions or are looking to invest in UK buy-to-let property, get in touch and one of our industry experts will be happy to help you get started on your investment journey!
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