Strange times

Its a bit of an odd time at the moment, we are speaking to a lot of people who are thinking of buying a new home. Many of those people have questions about what will happen to house prices in the next 12 months. What better to do than make a post about it…

What is happening at the moment?

I think this needs splitting up in to 2 sections, what we are hearing in the news and what we are seeing. This is because there is a difference between the two.

What are we hearing in the news? I am sure you have seen the same as we have. A recession is on the cards, the base rate is rocketing, house prices could drop by up to 30%.

But actually when you read into it a little more the news is not quite as bad as the headlines suggest, so lets take a look at them:

A recession is on the cards – Well, yes. That is technically true, but when you read into it a little more, the recession is expected to be quite shallow. To the point is is likely to only be around 10-25% as bad as 2007. So a recession yes, but a mild one by comparison to any recession in the last 100 years.

The base rate is rocketing – Again, yes. But again by historic standards it is still at 4% quite low. Even at 5% it would not be too bad. I remember when I first became a broker, I remember seeing a high street mortgage at 90% with a rate of 6.99%. Even after the (not so) mini budget, mortgage rates did not really hit those numbers.

House prices could drop by up to 30% – I will delve into this a little more in what we are seeing. But when you look at all of the numbers different people are suggesting most seem to think somewhere between 10-15% is where it will be. That would put house prices back to 2021-22 levels. Which means most people are not going to end up in negative equity.

What are we seeing

I speak to quite a few brokers as I think it is important to see how they are fairing. Generally speaking most brokers have had a good January as have we. However, some of that can be put down to people who were put off after the mini budget coming back to the market. Where 2022 ended badly, 2023 is starting well. But I think it is important to understand that without the mini budget 2023 would probably be marginally down.

House prices do seem to be coming down, but again only by around 5-15%. Certainly nowhere remotely close to the 30%.

In terms of new enquiries, we have had a quiet start to February. We always do though, it just seemed more quiet because January was busy. It is definitely picking up though.


I think the important thing to remember is that papers headlines have always been sensationalised and that is no different now. It is going to be a slower year than the last couple of years I think. But nobody is expecting it to be terrible. There is demand there, but peoples finances are being stretched due to the higher interest rates (and in turn repayments) and the cost of living.

But lets take a look at the positives, inflation is coming down, rates are expected to level off and potentially drop a little in a year or 2. Now could be a good time to make a cheeky offer.

If you would like to discuss your options to see what we can do for you and likely repayments do please get in touch.