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Housing Market Report Q1 2023

Housing Market Report Q1 2023

Q1 Property Market Report including the South East.

(Product related figures and static market sales as of 31/03/23) Data Source Spectre.  


Property Market Summary.


As we end the first quarter of 2023 how is the property market looking? Well, the figures are certainly not as bad as the media seems to portray. Yes, the number of price reductions seems to through the roof, there is a decline in agreed sales and properties are spending longer on the market. The concern and fear the media has whipped up has been spreading but what they fail to report however is the last few years the market has seen exceptional growth. These trends should only be viewed as the market levelling off and returning to a nominal baseline. Especially given the historically low interest rates seen throughout the pandemic. So how does this compare to previous years.  


From 1995 until 2023 the average mortgage rate in the UK was 5.62%. We are currently sitting at 4.84% other than the 3.59% all-time low seen in November of 2022 we are comparatively still seeing good rates.  



As we can see, over the years new property listings have remained consistent despite the economy being affected by other factors whether due to Brexit or political fallout. We might not be seeing the huge increase of market stock that we did in 2021 but the reality is, prices and sales volumes remain consistent.  

Now is the ideal time to move. Mortgage rates have gone down since the dreaded mini budget even whilst the Bank of England have raised its base rate. We are unlikely to see mortgage rates increase from its 4-5% range. Those in need of a mortgage should be realistic about the shift from historical low rates back to an average instead of waiting for rates to be reduced further for which there is no appetite.  

2023 has started in line with 2021/22 where new instructions remain healthy with natural spikes and dips (Easter increase and Christmas slumps). New instructions this month are within 2% of the average and there is no forecast for this to change in the coming months/year.  




Q2 has started out like previous years despite the natural fluctuations. The expectation from current market trends is for this trajectory to continue throughout the year with this coming quarters predictions showing new listings 2.3% below last year. Whilst seasonal and known events have been removed from the predictions the market continues to evolve so we will keep an eye on trends.  




As we can see those reducing their property prices have more than doubled since this time last year which again is to be expected. After the exceptional growth we saw in 2022 vendors are keeping their high expectations which is no longer appropriate. Many estate agents seem to be struggling to secure new listings using current pricing models so are overvaluing properties with the view to reduce the pricing once they can provide evidence for the lack of interest at last year's prices.  

So far this year 16% of properties that have reduced their property price have done so more than once. Whilst the pressure mounts to appease vendor expectations by overvaluing their property to win the instruction this will ultimately hurt the sales journey for both vendor and buyer in the long run. A stronger understanding of today's market conditions will smooth this out but will likely take some time to achieve.   




The fall through rate has remained largely the same over the last few years except for October 2022. The reason for this spike is likely due to the mortgage offers attained pre minibudget expiring or being pulled. Now that dust has almost settled it is important to market your property correctly. As a vendor you want to avoid reducing the price of your property and the fear it creates amongst buyers. Questions start to hang over the heads of properties that have been continually reduced or have been on the market for too long. This creates fear that maybe the property has something wrong with it.  

We could still see another October 2022 spike later this year as overvalued homes get pushed further down the listing, especially where mortgage valuations disagree with the inflated price expectations of vendors. Your buyer may not have the savings to make up the difference. Because of these reasons the expectation is that the fall through rate may well stay above the 5yr average.  




A slow and steady increase of vendor fatigue caused by weeks on the market with no sale is a continuing upwards trend although there is a long way to go before, we are anywhere near the withdrawal rate of the pre pandemic levels. 2019 Q1 saw properties withdrawn from the market at a 53% higher rate than they do today.  


With the rise in reductions its evident vendors are motivated to sell. The hurdle is changing the mindset of those expecting overvaluations. That being said, 10% of the withdrawal's witnessed in November in the wake of the mini budget crisis have already come back to the market. The key to seeing a successful sale in good time going forward will be pricing right to begin with.  





In the wake of the mini budget its clear we are still in a downward trend on sales since the end of 2022. As the market starts to settle the expectation is that there will be a slowing of sales. Levels are below that of last year however, sales are almost withing 1% of the 5-year average. An increase in new listings in the first quarter of 2023 is building confidence with the expectation that this will continue matching the pre pandemic levels.  

The housing market has been in a great position for almost a decade and comparatively we aren’t changing markets entirely so much as just experiencing a speed bump. Traditional service estate agents are more important now than ever to help sellers traverse the potentially choppy waters and secure a successful sale. 

First time buyers continue to be cautious of the current conditions especially given the speed of change in available interest rates. Many first-time buyers have very short knowledge of the property market, so the historical lows seen throughout the pandemic have left rose tinted glasses. A good mortgage broker and informative viewings should be able to combat this.  

Now is still a fantastic time to buy especially given the soaring rental prices and demand so high. With mortgage rates lower now and more in line with the historical average now is the time to get out of the increasing rental market and onto the property ladder.




March last year saw some 62% of properties agree sales within 4 weeks of listing compared with this March at 43%. We have seen first-hand the drop off rate of boots through the door but that hasn’t completely shaken the market and we may be seeing less people viewing a property, we are seeing more motivated or serious buyers.   


February saw a slight shift with more properties listed as sold within 4 weeks than January. This could be to do with the Christmas drop off but more likely the low demand at the back end of last year. This in turn may have caused the prices to be driven down. The reductions in prices have attracted buyer’s back to the market which is leading to higher demand and ultimately a faster sale than expected.  






A big part of how long a property remains on the market are the seasonal events. For example, properties that sell in January typically take longer because in the run up to Christmas the priorities of buyers shift and house hunting is typically put on hold.  

The peak seen last January was likely due to the boom where nearly half of all listings were selling within 2 weeks. March 2020 we saw the start of the pandemic which saw averages of 90 days caused by the industry standstill.  

Spring and summer remain the best time to move, other than the Easter break there are no other seasonal events and properties spend less time on the market. The same is expected this year although with vendor expectations, demand not as high and agents still overvaluing properties this will likely be higher. For instance, properties sold this month have been on the market nearly 20 days longer than March of last year.   


This figure depicts the average number of days from listing date until sold (STC) since the start of 2020, and within which month a sale was agreed 



As expected and relevant to most of our readers the South East was among the top performing regions along with the East of England and the South West. With the increase rental market in London, we have seen an influx of those as first-time buyers with budgets affording them properties in the outer areas and the much sought after green spaces that come with it.  

London’s appeal is shrinking every year with the ever increasing costs associated with the countries Capital. Building expenses and cladding issues have also acted as a deterrent to buying flats in the city.  

We can only speculate but given the conversations we have many of those first-time buyers moving to the South East are doing so because of the average house price. In London the average price now stands at £480,000 which is likely buying no more than a 1 or 2 bedroom flat. The average house price in Slough only 20 mins on the Elizabeth Line from Central London by comparison sits around the same with 3-bedroom houses starting from a little as £315,000. 



Data used in this article was provided by, and all images belong to Spectre.