Penwortham estate agent predicts 2023 house price fall

A Penwortham estate agent believes house prices will fall next year.

Michael Bailey points to analysis by a financial consultancy called Capital Economics that forecasts the Bank of England base rate hitting 3 per cent by next year, triggering a 5 per cent drop in house values.

This will be brought on by a jump in the average mortgage rate from 1.6 per cent at the start of this year to 3.6 per cent in mid-2023, the steepest rise in 32 years.

“If you’re considering selling your home, now’s probably the best time to do so,” said Michael, who runs the independent estate agency based in Penwortham and serving Preston and surrounding areas such as Lostock Hall and Leyland. “If you put it off, you could find that you’re selling it for a much lower price a year from now.”

Michael says spring and summer are traditionally good times of the year to put your house on the market.

He said: “Taking advantage of this seasonal window is going to be even more important this year.

“The forecast rise in mortgage interest rates in 2023 is likely to make home buying less affordable for people, with some homeowners and buy-to-let landlords finding themselves forced to sell.

“When this happens and more housing stock hits the market, it causes values to drop and all sellers are forced to accept lower prices.”

The parts of Lancashire with a lot of first-time buyers are more at risk because people in this group often stretch themselves further to get on the property ladder and don’t always have a financial cushion against mortgage rate rises.

Buy-to-let landlords that find themselves faced with higher arrears as the cost-of-living squeeze bites tenants, may also start to exit their investments, releasing yet more property onto the local market and depressing prices even further, added Michael.

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