Forecast economy

Residential Quarterly | Summer 2023

Q3 2023


The UK average property price fell 3.1% in the year to Q 2 2023 according to the Nationwide House Price Index. This is the second consecutive quarter of negative annual growth. On a regional basis, all regions saw price falls except for Northern Ireland which saw 0.5% positive growth. The worst regional performers were East Anglia, London, and the North West respective, all with negative growth of between -4% and -5%.

On a national basis, the Nationwide House Price Index fell 0.2% this quarter with more varied performance across the regions. The best performer was still Northern Ireland with growth of 2.4% - Wales also saw positive growth of 0.7% in Q2. The largest quarterly falls in house prices were in South West, at -1.2% and London, -1.1%. According to HM Revenue Customs, UK (seasonally adjusted) residential transactions in May 2023 were at 80,020. This was 20% lower than May 2022.

There is likely to be a fall in the number of sales that take place over the next 12 months, shown by the sentiment of agents in the RICS survey. Sales expectations are at -30 meaning that around two third of agents surveyed expect conditions for transaction levels to be tricky over the next year.

This is in line with what our own agents are seeing; applicants are down 3 viewings are also down, and price reductions are becoming more frequent. With sellers and buyers in a stand off over varying price expectations, those that need to transact will likely have to having comprise on value. Agents expect to start seeing some distressed sales now. Stock issues do still persist to some extent, but this is not anticipated to be enough to offset the interest rate and inflationary pressures. We expect to see prices continue to fall for this year.

Read full report here.