Articles
Affordability and value for money key factors for 2023 housing market
published by
Fran Puddefoot
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The latest house price index from Zoopla has identified the key trends for the property market over the next 12 months.
It should come as no surprise that the property website believes affordability will be the primary factor for buyers facing rising mortgage rates and shrinking disposable income.
A Zoopla spokesman said: “The more unaffordable a local market, the more households are priced out, weakening demand and impacting sales volumes and pricing. The opposite is true in more affordable markets where house prices tend to be lower.
“Higher mortgage rates increase the income needed to buy and worsen affordability for those buying with a mortgage (7 in 10 sales). The impact is the greatest in high-value areas where mortgages are bigger.”
While house prices are expected to fall in some areas, they are likely to prove resilient in more affordable markets and while coastal regions saw a post-pandemic boom the swing now is back to urban centres.
A key trend over the last two years has been the search for space. A proportion of buyers have looked to relocate to rural and coastal areas, pushing up demand and house prices more quickly than in other areas.
The initial wave of pent-up demand was brought about by more working from home and a spike in retirement. This looks to have run its course for now, as the coastal and rural areas are offering less value for money and there are fewer discretionary-motivated moves from cost-conscious buyers.
The spokesman added: “Housing markets in urban areas will fare better in 2023. Buyer interest remains stronger in urban locations where jobs are being created and there are more services.
“Family housing in city suburbs and commuter areas has registered strong buyer interest over the last year, while demand in city centres has been weaker as a result of more working from home.”
Author: Sarah Freeman, V&A Homes
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