With 2023 gone, what better time than now to reflect on the last year? Despite all the fears of recession, interest rate rises, and a general gloomy economic outlook, surprisingly, the property market experienced a slight drop in prices, a 1.2% drop compared to the previous year.
While property prices dipped overall, some areas remained where prices continued to rise and remained popular more than ever. In this article, we’ll provide our unique take on everything you may have missed in the property world across 2023.
Let’s get started.
Number of properties sold in 2023
In 2023, the property market received the sale of an impressive one million properties, which speaks volumes about the market’s activity and consumer confidence.
Market Resilience Amid Economic Uncertainty
However, while many properties were sold, what’s more intriguing is the context in which these sales occurred. Regardless of the doom and gloom of global economic uncertainty and even a minor decline in property values, the consistency in sales volume underscores a resilient market. While prices may have dipped slightly, the demand for property remains high, driven by buyer demand through the desire for better living spaces and a continued interest in real estate as a secure investment.
Diversity in the Market and Buyer Demographics
This level of activity also reflects the diversity of the market’s appeal. Data identifies that around 290,000 first-time buyers were entering the market in 2023. However, this is a significant decline from 2022.
Yet this shows that the range of buyers contributing to these one million sales was as varied as the properties themselves. The figure points to a dynamic market where different segments – larger homes, affordable housing, or investment properties – all found their buyers.
Impact of the Conclusion of Help to Buy Scheme
A pivotal moment in 2023 was the conclusion of the Help to Buy scheme on 31st March. This program, aimed at assisting first-time buyers, had a noticeable impact on property sales. As the deadline approached, there was a definitive uptick in sales, suggesting that many first-time buyers were eager to take advantage of the scheme before it ended. This surge definitely contributed significantly to the year’s total sales.
Continued Support through the Mortgage Guarantee Scheme
Despite the closure of Help to Buy, the government’s extension of the Mortgage Guarantee Scheme provides a continuity of support for buyers, particularly beneficial for those entering the market for the first time. This scheme, designed to help buyers with smaller deposits, likely played a role in sustaining the sales momentum throughout the rest of the year and through to 2024. It has provided a safety net that encouraged continued investment in property, maintaining buyer confidence even as the market adjusted to the end of Help to Buy.
Popularity by property type
The UK property market is made up of many different types of property. Historically, terraced houses have been the most popular and abundant. Additionally, given that they are also the most affordable type of property, it is no surprise that in 2023, they continued to be the most sought-after property type, achieving 140,000 in sales. Types of buyers for terraced homes include first-time buyers along with investors.
Semi-detached houses: a close second in popularity
However, semi-detached houses were not far behind in buyer preference, with data revealing that 130,000 of these properties changed hands. Similar to their terraced counterparts, the most in-demand properties were those with three bedrooms, a size that has consistently appealed to buyers seeking a balance between space and manageability.
Rising demand for apartments
More surprising, however, was that the market for apartments also saw a notable rise, with 120,000 units sold. This rise was likely fueled by the relative affordability of an apartment in a market dealing with heightened mortgage rates, especially among first-time buyers,
Detached homes: a shift in buyer preference
In contrast, the detached homes, which had seen a surge in demand during the pandemic, found themselves less in favour. The sale of 89,000 detached homes in 2023 signifies a rebalance, where buyers are leaning towards cost-effective options without compromising on quality or location.
Affordability and practicality
2023’s trends are a product of the current economic climate. With economic uncertainty heavily affecting spending, buyers were drawn to properties that offered value, practicality, and financial sensibility. Terraced and semi-detached houses were the most in-demand, apartments regained their appeal for budget-conscious buyers, and detached homes, while still in demand, faced setbacks.
This shift in the property market paints a picture of an increasingly savvy market, prioritising affordability without sacrificing their living standards. It’s a trend that defines the property landscape of 2023 and provides critical insights into the future direction of the UK housing market.
The average price of a property in 2023
In 2023, the UK’s average property price was £264,500 and, as mentioned earlier, represents a drop of 1.2% compared to the previous year. However, to put this into perspective, we have to zoom out five years to truly understand what this means.
Let’s take a closer look:
- 2018: The year started with an average of £211,792, climbing modestly to £214,178 by year-end.
- 2019: A steady rise was observed, from £212,694 in Q1 to £215,925 in Q4.
- 2020: The less we say about this year, the better. However, the year began at £217,911, escalating to £229,819 by Q4.
- 2021: This year showed continuous growth, starting at £231,644 and reaching £253,113 by the end.
- 2022: Opening at £260,771, the year peaked at £273,135 in Q3, before a slight drop to £265,195 in Q4.
- 2023: The first quarter saw a slight dip to £258,115, indicating a decrease from the end of 2022 but an overall increase from 2018.
With all of that considered, it becomes clear that the prices we see at the end of 2023 are a result of a continuous increase in property prices. Will property prices fall further? Or was 2023 just a year of market stabilisation following significant growth? We’ll discuss this in further detail later.
Average sale time
The average sale time for home sales in the UK in 2023 was like a yo-yo. At the start of the year, homes sold in an average of 36 days. But by April, this number had dropped significantly to just 29 days. There are several potential reasons for this drop, likely due to mortgage rates becoming more favourable compared to the end of 2022 or due to the end of the Help to Buy scheme resulting in a quick uptick in sales. Interestingly, as the year unfolded, the time to sell a home increased to 38 days.
Most expensive areas to buy
In 2023, certain areas in the UK stood out for their much higher property prices than other places. Unsurprisingly, many of these areas are associated with exclusivity and luxury in the property market. At the top of the list was Westminster, with average property prices hovering around the £900,000 mark, retaining its status as one of the most sought-after and prestigious locations in the UK.
Other areas also commanded high prices. St Albans and Winchester had average prices of around £580,000 and £520,000, respectively. Chichester and Oxford weren’t far behind, with properties averaging approximately £480,000.
Cambridge and Brighton & Hove presented as desirable locations, with average prices of around £510,000 and £430,000, respectively.
Bath, known for its historical significance and architectural beauty, saw average prices near £430,000. Chelmsford and London also featured on the list of expensive areas, with average prices near £380,000 and £525,000.
Most of the most expensive areas to purchase property remain in the country’s south.
Property price change
As mentioned above, property prices decreased by approximately 1.2% in 2023 compared to the previous year. This change, though modest, reflects the increased growth in prices witnessed over the last five years and beyond.
Where in the UK sold the most property?
In 2023, the South East emerged as the UK region with the highest number of property sales, totalling 84,800. Not far behind was the North West, which also saw high sales activity, with 71,300 properties changing hands.
In contrast, the North East experienced the lowest sales volume, with approximately 25,000 properties sold.
The average property price in this area
The average property price in the South East for 2023 was £1,453,036. Of course, this reflects many prime property locations, including Oxford, Reading and Winchester.
What was the most popular property type sold in this area?
In the southeastern region, sales were evenly distributed according to the popularity of different property types being sold. Terraced houses led the market, accounting for 26.2% of the sales, closely followed by semi-detached homes at 25.6%. Detached houses were also in high demand, making up 25.3% of the sales. Apartments rounded out the market with 22.9% of overall sales.
Property market forecast for 2024
Looking ahead to 2024, the UK property market shows signs of continuing into a more stable phase. A significant factor contributing to this outlook is the sharp decline in inflation, which fell to 4.6% in October 2023. This decrease was needed following years of continued rises amidst other economic uncertainties.
Additionally, as interest rates significantly impact the property market, it’s interesting to see suggestions that they have reached their peak. Forecasts suggest a decrease to around 4.7% by the end of 2024. This provides much-needed support for the future of the property market.
On another note, with an election year impending, it will be interesting to see if any housing policies are announced which could further lend support to the support behind the growth of the property market.
Regardless of the property market and how it plays out in 2024, here at Sold.co.uk, we’ll continue our goals to help as many people as possible get their properties sold. So, if you’re looking to sell a house fast, get in touch to find out more.
Where are houses selling fastest in the UK?
Liverpool was the location for the fastest-selling houses in the UK, with properties typically taking just 17 days to sell.
What type of house sells the fastest?
In 2023, terraced properties were the type of house that sold the fastest in the UK. This has been true both in the past year and historically. This is mainly due to their affordability and appeal to a broader range of buyers.
Where are house prices falling the most in the UK?
In 2023, the East of England experienced the most significant drop in house prices, with a decrease of 2.7%. This region saw the most significant decline compared to other areas in the UK. However, places like the southeastern and southwestern regions also saw reductions by 2.4% and 2.2%, respectively.