UK home prices will ‘stall’ by 2023 as surging mortgage rates crush demand, says Hamptons

So far, 2022 has been a relatively strong year for the housing market, with property prices set to rise 5% year-on-year in Q4, according to Hamptons, while 1.25m transactions will have taken place this year in Great Britain, But there are growing signs that residential sales will slow thereafter.

Hamptons says that 2023 is harder to predict and what happens to interest rates is key. The company projects that the base rate is likely to peak at around 2.5% in early 2023, before dropping slightly towards the end of the year or early in 2024.

Given the pressure on household incomes, Hamptons forecast average prices to flatline – remain unchanged – across Great Britain in Q4 2023.  If rates rise further than the estate agency anticipate, there is a stronger likelihood that prices will fall.

Transactions will bear the brunt of the downturn in 2023 as households sit tight. The drop in sales will stem from mortgaged buyers, particularly first-time buyers. Hamptons expect to see transactions return to 2013/2014 levels and are forecasting 1.1m completions across Great Britain in 2023.

2024 though, will be a year of recovery. While a general election is on the cards, Hamptons also anticipate a degree of pent-up demand from 2023 and falling interest rates. The company think property prices will rise 2% by Q4 2024 with London leading the way.  Transactions should return to 1.2m across Great Britain in 2024, the firm said.

Hamptons believe that 2025 will mark the beginning of a new cycle as the base rate returns to its new normal, likely to be around 1.75%. The company forecast prices to rise 3% across Great Britain, with London outperforming other regions at 5%. Transactions are also set to bounce back to 1.3m, surpassing the pre-Covid average.

Over the next four years, Hamptons think prime central London will see the strongest price growth at 15.5%. The East of England (12.0%) and South East (11.5%) are expected to follow as they more closely track London with flexible working tying the regions closer together.

Rents are set to outperform house prices over the next four years.  Despite affordability issues for tenants, rental growth will progressively reflect the increasingly high-cost environment faced by landlords. Hamptons forecast that rents will rise 5.0% in 2023 and 2024 across Great Britain.

Aneisha Beveridge, head of research at Hamptons, commented: “The housing market has outperformed our expectations once again in 2022, but with a cocktail of risks on the horizon, growth is likely to stall next year.  Financial pressures are raining down on households as inflation bites and mortgage rates rise.   And it’s unlikely we’ve seen the worst of it yet, with rates expected to peak at the beginning of 2023.  This means price growth in the years running up to 2025 will add up to 2021 levels.

“All eyes are on interest rates as this will be the key determinant of house price growth in the coming years.  Given many mortgaged homeowners won’t have witnessed interest rate rises, it will take time for them to adjust.  While it’s likely that the base rate will remain lower than it has in the past, higher levels of mortgage debt will magnify the impact of even small rises.  If mortgage rates surpass the 5% mark, there’s a much stronger likelihood that house prices will fall.

“With more stringent affordability testing in place since the financial crash and a record share of outright homeowners, we’re likely to see fewer repossessions and forced sales which were a key driver of house price falls in 2008.  Low-yielding landlords are the group most likely to sell up as they come under pressure from rising mortgage costs and new legislation.

“Longer-term, we expect the market to return to its traditional cycle.  Price growth will begin to recover in 2024, with London leading the way as a new cycle dawns in 2025.  However, stretched affordability will mean we’re likely to see considerably less price growth than in the past.”


House prices are starting to fall – new figures show



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  1. Typhoon

    It is fine to offer industry comment but what Hamptons are doing is “guessing” what might happen 12 /14 months ahead,  then publishing gloomy news which will scare and depress the public. Such commentary “from the industry”,  along with all the other doom and gloom, PREDICTED, NOT GUARANTEED, is likely to precipitate a price fall.  turkeys, Christmas, for, voting, comes to mind.

    No one is talking about anything positive right now and we are in real danger as a nation of talking ourselves into a deeper recession than otherwise would happen. If as much energy was injected into thinking about positive ways to keep the country productive, we would not be having any recession.

    Stop and take stock of the “really great things about our country, and be grateful for them. There is much to celebrate behind the grey veil of negativity the media (and our industry) are portraying 


    I can tell you what to do. Force yourself to stay positive. Refuse to have your lights dimmed by negativity. Resist it. There is not an event or situation you will ever have  to deal with in life that will have a better outcome by dealing with it from a negative perspective.

    Whatever the economy is doing, there are always people who want and need to sell. As an industry we have to stay alert to this and go overboard with the energy and effort we employ when communicating to keep our public positive and motivated and help them achieve what they need.

    As an old f**t who has been through several recessions in my career and flourished not just survived, I know that whatever the economy throws at us we can make business work.  This is where the really great agents sparkle.

    1. Lou Fletcher

      Thank you! I couldn’t agree more and such positivity is a breath of fresh air!  From one old f**t to another!

    2. undercover agent

      That is a great comment Typhoon. Very well said!


    Hamptons-why do you think you can tell us all what’s happening in a years time


    So -what’s happening in the back streets of Hull -oh -not your market


    utter rubbish and very negative IMO

  3. UKisgreat

    The market is already in correction territory. Fact.

    It is correction, not a crash. House prices in my region (SW) have shot up 40%-50% since spring 2020, a phenomenal  rise. Even if prices correct a whopping 20% over this contractionary period, they will still be up 20%-30% on 2019.That doesn’t sound like a crash to me. One only has to look at house prices since 1990 to see the corrections that have taken place have had a minimal impact on the overall picture. Its not being negative accepting a correction. One just have to tune pricing a bit more aggressively



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