UK Housing Market Review – Spring 2023

The UK’s housing market seems to be emerging from the winter months with a spring in its step as the market appears to have steadied somewhat since the government’s ‘mini-budget’ of September 2022.

But with inflation still at a record high and house prices also remarkably high what does this mean for house buyers and sellers that could be looking to move over the coming months?

Here at Enact Conveyancing, we’ve taken a look at the key points across the market to give the latest snapshot.

Current house prices

The main thing people will look at when assessing the UK’s housing market is current house prices. According to the UK’s current House Price Index (HPI), the average UK house price was £288,000 in February 2023, which is £16,000 higher than 12 months ago, but £5,000 below the recent peak in November 2022.

The average UK house price has fallen for the third consecutive month, on both a seasonally adjusted basis and a non-seasonally adjusted basis.

While the Office of National Statistics has reported a gradual fall in house prices – two of the highstreets lenders have reported contradicting results for March.

According to mortgage lender Halifax, UK house prices rose unexpectedly in March. The lender reported an increase of 0.8 per cent between February and March.

Kim Kinnaird, director at Halifax Mortgages, said the rise reflected an easing of mortgage rates and that the sharp increase in borrowing costs in November last year had “largely reversed”.

She added that the labour market, “a key indicator for house prices”, remained strong, with unemployment close to an all-time low.

In contrast to Halifax’s reports of growth, Nationwide registered a 3.1 per cent annual rate fall in March, the steepest drop since 2009.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “March saw a further decline in annual house price growth, with prices down 3.1% compared with the same month last year. March also saw a further monthly price fall (-0.8%) – the seventh in a row – which leaves prices 4.6% below their August peak (after taking account of seasonal effects).

“The housing market reached a turning point last year as a result of the financial market turbulence which followed the mini-Budget. Since then, activity has remained subdued – the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40% below the level prevailing a year ago.”

With mixed reports Myron Jobson, senior personal finance analyst at the investment platform Interactive Investor, said the conflicting assessments were “symptomatic of a hiccupping market that is adjusting to a comedown from the blistering pace of house price growth over the past few years”.

Interest Rates

Something that has accelerated on a continuing upward trajectory is interest rates. With rising inflation the Bank of England’s Monetary Policy Committee (MPC) have voted regularly to increase the UK’s interest base rate – currently, this stands at 4.5% with the next vote due on the 22nd of June 2023.

While this has been a pain point for house buyers, especially first-time buyers, looking to get an affordable mortgage product – reassuringly mortgage rates have stabilised significantly since the ‘mini-budget’. At that time when the market went into a frenzy some lenders increased their mortgage products to up to an eye-watering 6%.

However, Rightmove’s latest house price index indicated with more competitive rates on offer for first-time buyers, more may be encouraged to take the leap now. The average mortgage rate for a 5-year fixed, 15% deposit mortgage is currently 4.46%, with the lowest rate for this mortgage type standing at 4.19%. This has edged down from an average of 4.65% a month ago, but it is still much higher than the average rate of 2.64% at this time last year.

First-time buyers

As mentioned above, first-time buyers could be encouraged to get onto the property ladder with mortgage rates more in line with the current base rate.

However, first-time buyers are still facing challenging times suggests Rightmove. The property portal recently reported that the average asking price of properties popular with first-time buyers – those with one or two bedrooms – hit a record price of £224,963 in April. That is 2% higher than a year ago, even though higher mortgage rates have made buying a property less affordable for many.

The portal explained further that solid buyer demand in this sector which is now 11% higher than in the same period in 2019, illustrates the continued strong desire from would-be first-time buyers to own their own home. This is even more understandable given the fiercely competitive rental market, with soaring rents reaching new records and making buying compelling for those who can raise the deposit and obtain a mortgage.


It appears that despite the current cost-of-living crisis that people are facing in the UK, the housing market is still showing strong signs of resilience. House prices haven’t yet fallen off a cliff edge as we’ve witnessed with previous financial strains on the UK’s economy.

The reason for house prices falling is partly due to the fact there is more housing stock for buyers to choose from, meaning there’s less competition and buyers are not having to outbid each other. Therefore, prices are being set at a more realistic value to rather than the previous overinflated prices buyers were paying for them.

Interest rates are still rising to combat record-high inflation but mortgage rates are more stable compared with the tail end of 2022 meaning those looking to take out a mortgage should have more confidence that they’re getting a favourable deal.

Typical seasonality trends would predict spring to be a busier time for the housing market as people are more motivated to put their property on the market and get moved in time for summer. Therefore, over the coming months, it will be interesting to see if this trend continues and how much the economic challenges impact people’s decisions to move.

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