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Understanding the UK Housing Market in 2023 - Are House Prices Set to Fall?

Understanding the UK Housing Market in 2023 - Are House Prices Set to Fall?
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Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin31 Oct 2023

In the last twenty years, the UK housing market has witnessed an extraordinary surge, with house prices skyrocketing by an astonishing 207%. This remarkable growth was primarily driven by consistently exceeding demand over supply. Commencing with an average house price of £91,999 in 1999, the market scaled its pinnacle at £295,903 in August 2022. Nonetheless, as 2023 is underway, mounting apprehensions revolve around the possibility of a prolonged decrease in UK house prices.

 The United Kingdom is presently grappling with a cost of living crisis, giving rise to inflation and escalating prices across nearly every purchase. Furthermore, the recent hike in interest rates has added to the complexity of securing an affordable mortgage. All of this has then translated into a challenging time for the housing market but are prices set to fall and are we witnessing the end of this prolonged growth wave?

Signs of a Market Shift

There are subtle signs indicating the possibility of a noteworthy shift approaching. At present, the Office for Budget Responsibility (OBR), a wholly independent entity tasked with dissecting the intricacies of the UK's fiscal landscape, is actively predicting a substantial 10% decline in house prices over the coming decade. The trigger for this forecast is widely attributed to the turbulent events following the September 2022 mini-budget.

Many housing reports have highlighted monthly declines year-on-year since the market's peak in August. While the extraordinary growth in house prices during the pandemic, which saw average price increases of up to 10%, was always considered unsustainable, the need for a correction became apparent.

The Numbers - How Much Have House Prices Fallen?

The house price report by Nationwide Building Society for April 2023 disclosed a 0.8% drop in house prices between February and March and in August, prices have seen an annual growth of 1.7%.  There is a north-south divide, as properties in the north appear to be increasing in value while properties in the south are dropping.

The decline in interest for home buying reflects the consequences of the prevailing cost-of-living challenges. A growing number of individuals are presently emphasising financial caution over the pursuit of new, larger homes. This shift is underscored by a significant decrease in mortgage approvals, with a 40% decline compared to the same period last year, partly attributed to the Bank of England's decision to raise its base interest rate.

Nevertheless, amidst these fluctuations, it's worth noting some more positive indications. For instance, Halifax's recent findings reported a 1.1% increase in house prices in February compared to the previous month, when prices had remained stagnant. Rightmove's data also supported this trend, showing a 0.8% uptick in house prices during February.

Timing Your Move - Is Now the Right Time?

Zoopla's house price index update for Q1 2023 showed a slowdown in house price inflation to just 4.1%. In the grand scheme of things, house prices have dipped by 1% since October 2022. Nevertheless, the market continues to show resilience, with an anticipated total of around one million property sales in 2023. This is underpinned by a substantial 65% surge in the number of homes available for sale compared to the previous year.

This indicates that the housing market may be approaching a more balanced state between supply and demand. If you're contemplating a move, it's crucial to conduct a comprehensive evaluation of your financial situation, particularly in regard to mortgage expenses.

 Seeking advice from a mortgage brokers is a prudent step to gauge potential costs and ensure your income aligns comfortably with the current borrowing expenditures.

Additionally, if you're concerned about the prevailing interest rates, discussing your mortgage options with a broker can provide valuable insights into whether it's the right time to make your dream move.


As we move through 2023, the UK housing market is showing signs of change after years of relentless growth. As the Office for Budget Responsibility predicts a drop in house prices, recent reports present a varied scenario, where certain regions continue to see price hikes. Whether you're considering buying or selling, staying abreast of market trends and seeking guidance from professionals, such as mortgage brokers, is pivotal for making informed choices in this ever-changing landscape. Relocating is a substantial undertaking, demanding meticulous planning and financial evaluation to guarantee the right move at the right moment.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.