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Market predictions for 2023

Journalist: Jake Carter, Mortgage Introducer

ended 19. December 2022

Within this piece, I plan to identify what experts are expecting to see next year across the market. 

  • What are your predictions for the market in 2023?
  • Will conditions improve, become worse or remain stable? 
  • Do you expect the base rate to continue rising? If so, to what end? 

9 responses from the Newspage community

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Riz Malik
Independent Financial Adviser at R3 Wealth
The UK property market will continue limping for most of 2023. Towards the later part of the year, things will start to pick up as inflation falls and Rishi unleashes his feel-good growth plan taking us to the next General Election. Although purchase activity will fall, the mortgage market will be propped up by those looking to refinance and consolidate their outgoings.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
I imagine the housing market as someone on life support and the doctors are considering switching off the machine. Just as its moving towards the light the heart starts pumping by itself again. The first half of this year will be painful; slow transaction levels, falling prices, rising interest rates. Then, half way through the year the Bank of England will realise that the economy is in the gutter, unemployment is rising and inflation has fallen off a cliff and will have to pivot. It will become obvious that they should have stopped raising rates in the autumn of 2022 and they will have to cut aggressively. This will stimulate the economy, the housing market and the employment figures and towards the end of the year those who have managed to keep their homes will feel more comfortable.
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Mike Staton
Director at Staton Mortgages
Watching somebody predict next year's mortgage market is a bit like watching Harry Kane's second penalty against France, Look down at the floor, close your eyes, then run and swing, more than likely you will miss the target and the whole of England will be in tears. With predictions that the next BOE increase is as little as 0.25%, I think we have already seen the peak in interest rates and the huge predictions of 6% base rates don't seem to be coming to fruition. I think we will start to see further reductions in the lender's fixed rate as it appears that the base rate is becoming more stable. It would be nice to hear from the BOE what their expectations for 2023 are instead of them acting like a secret society keeping all of us plebs in the dark, but then I suppose it would cause less misery for them to control us if that happened
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Elliott Culley
Director at Switch Mortgage Finance
2023 will be a hard 12 months for brokers and consumers. Fixed-rate mortgage rates are decreasing and this positive will hopefully entice consumers back into the market for purchases and will be a relief for clients needing to remortgage, although rates will still be much higher than they paid previously. The main enemy now is inflation and the effect this is having on the clients' ability to lend the amount they require. Brokers and clients are already experiencing this in 2022, with lending amounts for borrowers reduced and becoming harder to obtain. ONS data determines a significant amount of the affordability calculations. With inflation high, this will continue to increase and the energy price guarantee is to rise further in April. How lenders approach the affordability problem will shape the next 12 months for the market.
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Premium
Kylie-Ann Gatecliffe
Director at KAG Financial
I believe the base rate will continue to rise into early 2023. However as we've seen recently, this isn't affecting lenders rate offerings as much as it usually would. Which will hopefully instill confidence again into buyers. I think January will start slow, then we will hopefully see stock levels increase and prices become more affordable and competitive for home movers. Spring is usually a busy time for those looking to move, so this would be a perfect time for the market to stabilise. By Summer I do think we will have a grip on inflation and by the back end of the year I predict rates will start to fall again. With rents increasing I do think this will force a lot of renters to look at alternative housing options, such as shared ownership etc.
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Malcolm Davidson
Director at UK Moneyman
When the Chief Finance Officer of the UK's largest Building Society says that property values may go down 30% but then again they may go up (!), one might say that he's unlikely to be invited to be a contributor to the 2023 Old Moore's Almanac - but it raises a serious point. He basically said he has no idea what will happen but of course the next day's headlines were full of doom and gloom. Zoopla have been more helpful and are predicting reductions based on lots of data of up to 5% with the South being worst affected. This type of market would present fantastic opportunities for First Time Buyers to get onto the ladder next year as vendors are more likely to listen to offers whereas earlier this year when there were over 20 registered applicants for every property for sale.
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Graham Cox
Director at Bridging Hub
I believe property prices will fall between 15-20% in 2023. That's a good thing and long overdue. One major lender reported prices falling 2.3% last month. That's 27.6% annualised. The house party is well and truly over.

I think the base rate will peak around 3.75-4% early next year and mortgage rates around 5-5.25%, approximately 2.5 times higher than they were a year ago.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
I'm hopeful that we'll see a little more stability and less chaos in 2023 (please?), as most people in the wider housing market have all been working at unsustainable levels for the last 18-24 months. Whilst the headlines will no doubt talk about "transaction numbers plummet" these need to be seen in context; numbers will be down compared to a record-breaking couple of years, if we look back to the pre-pandemic market then the headline should be more like "mortgage transactions return to normal", but that's not quite as catchy. Mortgage rates are likely going to settle around a point where the best-fixed rates are in the mid to high three percent range, which will look cheap compared to where they were a few weeks ago, but expensive to those coming off the deals from last summer, when we saw some rates at under 1%.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
I expect to see house prices fall by a minimum of 10% over 2023. Moreover, base rate will likely settle at around 5%. I anticipate inflation to remain well above the government’s target rate of 2% throughout the entirety of 2023, even as inflationary pressures arising from COVID and the conflict in Ukraine start to ease. This leaves the government with little choice but to maintain base rate at a level not seen since 2008. One might assume that the combination of the above factors paints a bleak picture for investors. Although, I would argue this gives rise to ample opportunity to pick up distressed assets at below market value. Anyone in the fortunate enough position to be able to hold assets should look to build a ‘war chest’ and actively invest.