On the move...

highest rate since 2008. Andrew Bailey, governor of the Bank of England, said: “We expect inflation to start falling more rapidly...”

How does inflation impact the housing market?

National house prices are falling

How will this affect your West Devon home?

It’s certainly been a rocky economic road over the last year. We’ve seen three Prime Ministers, a disastrous mini-budget, and the Russia-Ukraine war severely impacting our economy. Furthermore, the cost of living crisis is plunging millions below the breadline, and now we hear warnings of the potentially longest ever UK recession.

Will the West Devon housing market ‘crash’?

Headlines predicting a housing market ‘crash’ have been dominating news of late. But are they accurate? To interpret how the market may perform, we must first understand how economic factors can affect house prices nationally.

Back in December, the Bank of England raised its base interest rate to 3.5%, the ninth consecutive increase and the

In general, rising inflation coincides with slower house price growth and therefore you’d expect a steady fall in inflation to allow house prices to continually increase. But it’s important to note that throughout 2022, the housing market did not operate at “normal,” pre-pandemic levels.

In early 2022, house prices reached 18-year record levels and there were signifi cantly fewer homes coming to market than there were prospective buyers.

But towards the end of last year, strong demand began to decline. The UK housing market saw a drop in new buyer enquiries for the ‘sixth consecutive month’ in October 2022 (RICS monthly report, November 2022). With lower demand, prices will begin to fall.

What about mortgage rates?

Many economists first predicted fixed mortgage interest rates could reach highs of 6%, but they now lean towards an average of 4 to 4.5% by the end of 2023.

What has been happening in West Devon?

According to data from HM Land Registry*, sold prices across the area in October 2022 increased by 12% year-on-year, but were 1.4% lower than the previous month. The average price for a detached property was £338,184.

In December, Rightmove reported asking prices across the Southwest had fallen by 3.4% from November, with properties taking an average of 43 days to sell. However, this was still a 6.3% year-on-year increase.

Should you sell your home in 2023?

Although an uncertain economy is causing market fluctuations, I don’t anticipate a “crash” back down to pre-pandemic levels. I believe that properties will take longer to sell than we have seen in the last couple of years - but they will still sell, as people will always need to move, and the odds remain in favour of sellers.

If you’re wondering whether to sell your home in 2023, working with a property expert who understands local market conditions is crucial if you want to sell for the best possible price.

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