Repeat after me in a whiney little voice:
“House prices will drop by 30% in 2023”
“What goes up must come down and the property market is going to correct sharply”
“Don’t buy a house for at least 12 months. Wait for prices to drop”
“Crash, crash, crash – this is the sound of house values next year”
“It’s not a question of if prices will drop it’s by how much”
Unless you are a blind goldfish you will recall these mantras being wheeled out by certain ‘experts’ in the last quarter of 2022 – just a month or two ago – all desperate to be right and no doubt born of some personal political agenda or other. Much of this hogwash was then translated into newspaper headlines and news-reader scripts that set out the direction of travel for a housing market that they said was now ‘embattled’ and with no chance of finding decent health in 2023. A constant three month narrative amongst the chattering classes that said we will absolutely, definitely, most certainly see an inevitable meltdown. There was simply no way that it wasn’t going to happen.
So much so that if you Google “house price crash 2023 UK” 96 million results pop up. The doomsters and their half-empty glasses have indeed been busy.
I remember a similar scenario in early 2020 when the same experts predicted a bricks and mortar Armageddon due to the inevitable hardship we’d all face from the pandemic and from the resulting lockdowns.
I also remember them trotting out the same lazy, ill-thought, opportunistic rubbish in 2014, 2015 and 2016 as we considered whether to Brexit or not. And then again when the threat of a ‘No deal Brexit’ was hung over our heads in 2018 and 2019.
So far, the doom-mongers have scored no points in this game in nearly ten years whereas brave pundits like myself (actually just me) have stated with logic and careful contemplation that in all of these scenarios house prices would not drop like the veritable stone. I even won some bets off the back of my positive predictions.
My view as frequently posted on social media and as stated in countless telly and radio appearances for TalkTV, GB News, LBC and the BBC was that prices, whilst they move around a bit and we’ll always see dips here and there, ‘would not end up lower 12 months hence’. I said this in 2015 and then every year until now. And I’m still saying it.
But what of now? Surely this time it’s different? We’re bound to see values drop due to the clumsy Kwarteng Budget triggering wholesale money cost rises coupled with a mad bloke in the Kremlin causing gas and electricity costs to skyrocket. Aren’t we? All whilst a Bank of England that’s been caught on the hop (you had just one job) hikes interest rates ever higher in order to mitigate the inflation that it itself contributed to by printing too much money and by not tweaking rates six months before it actually did. A woeful performance if ever there was.
Well no. I’m afraid that prophecies of the disintegration of UK property values have been rather overdone. Again.
As I write this, Rightmove has just published its January HPI which shows that asking prices have risen by 0.9% since last month. Yes, this is asking prices rather than sold prices but this is off the back of a 2.1% drop in December and a 1.1% drop in November and shows consumer sentiment quickly returning to positivity.
Halifax and Nationwide too had recorded a weakening of monthly prices in Q4. Nationwide’s analysis trends downwards by 5.1% since September and the Halifax HPI has eased by 4.3% in the same period.
But it’s my belief that much of this effect is a consequence of a startled public brought about by a ravenous media that has sought to scare us all as much as it could. Bad news gets more clicks, you see. It became a self-fulfilling prophecy whereby exaggerated headlines put buyers off of buying. This demand hesitance has then translated into lower prices via spooked sellers.
However, this angst will be short-lived.
Why do I think that? Pay attention – because the latest economic numbers look better. Much better.
Fixed rate mortgage rates are plummeting as Gilt yields have fallen through the floor. Unemployment remains ultra low. Wholesale gas prices have all but returned to pre-Ukraine invasion levels. Electricity bills will now fall. Therefore inflation has probably peaked. Which means there is less reason for the clowns in Threadneedle Street to squeeze us much further on the day to day Bank rate.
Ladies and gentlemen, the pressure is subsiding and soon it will be time to start your engines once again after this minor interruption to normal service.
And to those that continue to lament the housing market and to try to do everything they can to diss it – I’m sorry but once again you have failed.
Better luck next time. I’m sure you’ll keep trying though – as all failures should.
Russell Quirk is Co-Founder of ProperPR the property industry public relations agency, and is a regular commentator for national media on the housing market