If you’re debating whether to part with your hard-earned savings and buy your first home in 2023, or deciding if it’s the right time to move, this post is for you!
2022 was a year of ups and downs for the housing market and for all involved, from home buyers to mortgage advisors and lenders.
We saw the property market carry on strong at the start of last year, with the demand for properties – and the prices they were selling for – still at record highs. And, despite mortgage interest rates rising, homes continued to be in demand.
The market began to settle around late summer, but made a U-turn in September 2022 following Liz Truss’ mini budget announcement and the resulting crash in the value of the pound.
Due to a combination of the government’s unpredictability, media speculation, and the cost of living crisis, potential home buyers and sellers started to put their plans on hold.
Was now the worst possible time to buy? Would the property crash everyone had been talking about post-pandemic actually happen? And will the government ever stop increasing the base interest rate?
With stability now seemingly restored in the UK government, plans to bring down inflation in place, and – hopefully! – fewer financial surprises ahead in 2023, we’re here as mortgage specialists to talk you through the pros and cons of buying now versus waiting.
It’s more important than ever to seek expert guidance, which is why you should use a Beewise mortgage advisor! With years of knowledge and up-to-date insight on the mortgage and property market, we’re here to help you make the best decision for your situation.
So, read on to find out if you should take the plunge or stay put for now!
What will happen to house prices in 2023?
As previously mentioned, 2022 saw record high price increases and properties selling quicker than ever before, essentially a repeat of 2021’s housing market.
Although there are many factors as to why this happened, one of the biggest was the halt the pandemic put on homebuying.
When the world started returning to normality, not only did the market see its usual buyers and sellers, those looking to get on the property ladder, upsize or downsize, there was also an influx of people whose lives had been changed due to Covid.
People were now looking for extra rooms for an office from home, more space due to going out less, bigger gardens, relocation thanks to remote working, a change of scenery after two years spent inside… The list goes on.
This huge pressure on the housing market, combined with a stamp duty cut to get the economy moving and the ever-popular Help to Buy scheme coming to a close, put housing stock in high demand.
When a new property did come on the market there tended to be a backlog of people waiting to view it. And, many buyers were so desperate to secure a home they’d offering over the asking price to do so.
As 2022 went on we saw this demand start to slow down, and it felt like the moving frenzy had finally peaked. There was a better balance between buyers and sellers, and with the end of the stamp duty cuts and Help to Buy there was less urgency for people to move.
Even before September’s mini budget, experts had predicted house price increases would start to slow in 2023. With less pressure on the market, increases were expected to stop, as was the time it takes to sell a home.
Hopefully in 2023 we’ll see buyers having more time to book in second viewings, think over their decisions properly, and be able to make offers under asking price – something which was the norm in pre-pandemic times.
Due to the drop in demand, a modest fall in prices is also predicted. So, while you won’t see a dramatic crash across the market, 2023 is definitely a good time to buy!
Plus the market is typically quieter in the winter months, making now the ideal time to start looking at your own pace.
Will mortgage interest rates rise or fall in 2023?
Another much-talked about topic over the last couple of years has been mortgage interest rates. Often linked to the Bank of England’s base rate, these have fluctuated wildly post-pandemic due to the economy.
With a recession in 2009, the Brexit vote in 2016, lockdown in 2020, Russia’s invasion of Ukraine in 2022 and our current cost of living crisis, it’s safe to say there’s been economic instability for a while.
And, the combination of these multiple once-in-a-lifetime events saw interest rates drop to a record low in 2021 – 0.1% for the Bank of England base rate and 0.79% for some fixed rate mortgage deals.
For those who bought a house or remortgaged around this time, this would have been amazing! But it was inevitable interest rates would begin to rise back to normal figures at some point, and we saw this happen slowly through 2022.
Most economists are in agreement that we’ll never see rates this low again – barring another world disaster of course! And, as the government try to bring inflation back down to a manageable level it’s predicted we’ll continue see more base rate rises well into 2023.
This won’t necessarily see mortgage interest rates go up though. As a result of the mini budget, the cost of borrowing for banks and building societies – the money they lend for mortgages – shot up drastically.
Lenders immediately pulled fixed rate deals with little to no notice, bringing out newer, increased rates to cover their costs. But, as we’ve seen the economy settle, lenders’ rates have too.
And, as most lenders have already factored in predicted base rate rises to their current deals, we’re starting to see a slow fall that’ll hopefully even things out as the year goes on.
So with both house prices and mortgage interest rates coming down at the moment, it’s as good a time as any to buy! Get in touch with Beewise here to find out how much you could potentially borrow towards your dream home.
5 reasons why now is the right time to buy a home!
In addition to the 3 mentioned before –
· House price increases falling
· More time to consider properties viewed
· Mortgage interest rates coming down
You’ve also got the added bonus that as a first time buyer you’ll be –
· Building equity through paying a mortgage
If you’re renting, 100% of every monthly payment goes straight to your landlord. With a mortgage, even if you were paying interest of 5%, the remaining amount from your monthly payment goes toward clearing your loan – AKA, money in your pocket.
Buying a house now, as opposed to in 12 months’ time, means that 12 months’ worth of payments (minus the interest) could be yours!
This could enable you to clear your mortgage sooner than planned, or give you the ability to build equity in the property quicker. So, if you decided to upsize to a more expensive property, you’d have more money to play with.
And your fifth reason is –
· Great schemes to get you on the ladder!
The government had originally planned to scrap their Mortgage Guarantee Scheme, enabling first time buyers to put down just 5% deposit, at the end of 2022. But, it was announced in December they’re extending it until the end of 2023.
First time buyers also have access to the Deposit Unlock scheme, helping you buy a new build home with just 5% deposit, and there’s lots of options for homemovers too.
Regardless of whether you already own your own home, you could take advantage of shared ownership, and Joint Borrower Sole Proprietor mortgages – a way to boost the amount you could borrow.
If you’re thinking of buying, chat to your local Beewise mortgage advisor first. That way, we can give advice tailored to your specific situation.
Other ways Beewise can help you
Beewise are about more than getting you moving, or getting the most suitable mortgage for your needs. Voted Best Mortgage Advisor Office in the UK at the 2022 ESTAS Awards – read all about it here! - we’re on hand with expert advice from start to finish.
Plus, we work with lots of different banks and building societies, so your Beewise advisor will have access to a whole host of deals, and we know the lending criteria required in different situations.
Whether you’re thinking of getting on the property ladder, wondering if it’s the right time to move, or weighing up remortgaging versus relocating, we’re here to help.
We can also be flexible around your busy schedule, offering same day appointments evenings and weekends. And, we can also liaise with estate agents and solicitors on your behalf, making the whole process as stress free as possible!