March 2023 property market analysis from Kate Faulkner

publication date: Mar 29, 2023
author/source: Kate Faulkner OBE, Property Expert and Author of Which? Property Books

March 2023 property market analysis from Kate Faulkner
Is the market performing better than forecasted?

Jump to:

Summary of property price and market indices

National property prices

Property prices by country

Regional property prices

City/town property price tracking

Demand, supply and transactions

Where is the market going?


The UK’s most comprehensive property price report

This report is to help give everyone – industry and consumers – a quick five-minute guide to what’s happening in the property market, according to the property indices, along with property expert Kate Faulkner’s comments.


Property price and market indices summary

Better than expected market surprises many as buyers return
“The average price of property coming to the market rises by just £14 this month (+0.0%) to £362,452. This is the smallest increase from January to February on record, though prices remaining flat rather than falling as some expected could be seen as a positive indicator for the year ahead.”  
Prices stabilising and stock levels heading back to normal
“Asking prices across England and Wales dipped by a slight 0.2% during January following the surprise bounce of 0.6% in December, making the year-on-year growth just 1.3%.”

Annual house price growth turns negative in February, falling to its weakest level 
since 2012
“Annual house price growth slipped into negative territory for the first time since June 2020, with prices down 1.1% in February compared with the same month last year. Moreover, February saw a further monthly price fall (-0.5%) – the sixth in a row – which leaves prices 3.7% below their August peak (after taking account of seasonal effects).”

Annual house price growth unchanged for third consecutive month
“The average house price in February was £285,476, +2.1% up on this time last year, and has been stable over the last three months. When comparing to January, there was a +1.1% increase in house prices through the month of February, although overall prices are flat compared to three months ago.”

Prices continue to rise but market cooling
“On a monthly basis, prices in February increased by £1,860, or 0.5%. Looking at the last twelve months, February’s 0.5% increase was only exceeded on three occasions (July – September 2022), and only twice has the monthly change been negative.”

Do our pricing and transaction forecasts for 2023 still stand?

“Annual house price inflation slows to 5.3% down from 8.6% last year.”


What are the indices saying is happening to house prices today versus the past?

National property price tracking


It’s always interesting when prices go ‘up and down’ as it takes a while for the indices to catch up as they measure the market at different times.

Hence, we see a huge range of annual price rises – and one fall this month. Land Registry and e.surv tend to lag behind, so are still reporting good growth year on year of 5-10%, but that’s because the data relates to December 2022 and it’s not yet reporting on the new year.

Mortgage companies Halifax and Nationwide are showing some contradictory month on month price movements with Nationwide showing a small decline, while Halifax shows an uptick. However, the range of -1.1% to +2.1% is hardly significant and just suggests prices, as far as the time lenders are measuring them, are pretty static.

The surprise one is perhaps Rightmove which should, in theory, be a ‘lead indicator’ for house price movements and I would expect them to show prices are starting to fall year on year, but even they are suggesting prices have stabilised.

Further data from Rightmove though shows some fantastic information which suggests that the market is still doing pretty well considering all the negativity, especially when the right comparison is made ie not year on year, but back to pre-Covid levels of 2018/19:

*The latest snapshot of buyer demand shows the number of people contacting agents is up by 11% in the last two weeks compared with the same period in 2019’s more normal market

*The number of sales agreed continues to rebound, and is now just 11% down on 2019’s levels, recovering from 15% down at the start of the year, and 30% down in the aftermath of the mini-budget

*While there is still an overall shortage of property for sale, down by 24% compared to 2019, there is more choice for buyers than a year ago, giving prospective buyers confidence for their onward move

*The first-time buyer sector which are holding up most strongly and are down only 7% on 2019

And this is significant as according to Rightmove, first time buyers are “recovering better than the discretionary upper-end sector”. They go on to say, “conversely and an indication of hyper-local and sector differences, sales in the top-of-the-ladder sector are down by 16% in the first two weeks of February compared with the same time in 2019.” have produced some great data this month too. According to their report, “the total sales stock count for England and Wales swelled in January by nearly 16,000 to reach 369,053, although this total remains less than the 10-year average of 423,417.” So in reality, the market still has an undersupply.

It’s not all great news though. “Time on Market for unsold property has increased swiftly over recent months to 100 days” but, when compared to the pre-pandemic years, this figure is “16 days less than in February 2020.”

And Zoopla conclude that from an offer perspective, “sellers having to accept an average 4.5% discount to the asking price to achieve a sale – the highest for 5 years as a buyers’ market takes hold” and their latest chart shows that price growth is definitely losing momentum.

So although we all “know” there is a ‘worse’ to come from a property price performance perspective, so far, the property market is performing better than forecasted – according to the indices.


Download Kate Faulkner's latest property price and market report here


Property prices by country


Country growth remains strong in England, Wales and Northern Ireland, but this is based on Land Registry December figures, not the latest data. Meanwhile, Scotland has seen annual growth slow.

Latest data from Halifax suggests that the rate of growth is slowing a lot more to single digits and shows that price growth rates are declining:

“The rate of annual growth slowed in all nations and regions in February. Annual growth fell the least in Scotland. House prices in the nation are now an average £198,779 (a growth rate of +2.2%, vs +2.3% in January). Similarly in Wales, annual growth in February was +1.2% (vs +1.9% in January), with homes costing £210,917, on average. Those purchasing a home in Northern Ireland will now pay £185,009, on average, an annual growth rate of +5.7% (vs +7.0%) in January.”


Summary from the indices of the Scottish housing market

But as the data from e.surv shows, the performance across Scotland ranges dramatically. Some areas are falling while others are still showing double digit growth.

Scotland’s house price growth continued in December, rising in 29 Local Authorities over the year
“The average house price in Scotland in December 2022 has increased by some £14,800 - or 7.0% - over the last twelve months. This annual rate of growth has marginally decreased from November’s revised 7.1%, but only by the smallest of margins. In fact, prices in December increased by just £63 in the month, but an increase is an increase, and somewhat remarkably this rise established yet another record average house price - £225,520 - for the tenth month this calendar year.

“In December 2022, 29 of the 32 local authority areas in Scotland saw their average prices rise above the levels of twelve months earlier, the same number as in November. The three areas where values fell over the year were, in descending order, Aberdeen City (-5.4%), Scottish Borders (-3.0%) and Stirling (-0.7%). Aberdeen City has now fallen by nine places over the year to 24th in terms of its ranking of average prices compared to the other 31 local authorities in Scotland. This month in Aberdeen City, flats have experienced the largest fall in value, from an average £120k in December 2021 to £105k one year later.

“The area with the highest annual increase in average house prices in December 2022 was the Shetland Islands, where average values have increased by 19.5% over the year. In the Shetland Islands, detached property values have seen the highest rise over the year, from £190k in December 2021 to £240k twelve months later, but this is based on a relatively small number of transactions. On the mainland, the highest annual increase was in East Renfrewshire, up by 17.7%. This increase has been assisted by the sale of a £2.3 million detached property in Giffnock, some nine miles to the south of Glasgow. The property is the most expensive home to have been sold in East Renfrewshire in the last five years.”


Download Kate Faulkner's latest property price and market report here


Regional property prices tracking

Data from all the indices is similar to the national for each region. The Land Registry is still showing double digits for most areas – bar London – while other indices, such as Rightmove, and the mortgage indices, are moving now to single and small year on year rises. show the South East and London are stagnating, if not going into reverse and Halifax is picking up a similar picture on an annual basis.

According to Zoopla “Supply returns to normal levels, boosting choice. Slower sales and a steady flow of new supply have boosted the stock of homes for sale by over 60% compared to last year. The average estate agent office has 24 homes for sale compared to just 15 a year ago. This creates more choice for home buyers who now have more room to negotiate on price. It also helps reduce the upward pressure on house prices. Sellers, supported by agents, are adjusting asking prices in the face of weaker demand. Over 40% of homes currently listed for sale on Zoopla have seen their asking prices reduced to attract price-sensitive buyers. These adjustments have been broadly uniform across regions and property type.”

From a regional perspective Zoopla explain:
“Activity levels are holding up in more affordable markets. While overall sales volumes are lower year-on-year, they are ahead of the pre-pandemic years in more affordable housing markets such as the North East and Scotland. This is because higher mortgage rates have less of an impact on demand in lower-value markets. In contrast, sales volumes in the Midlands and southern England are up to 9% lower compared to the pre-pandemic period. Higher house prices, which have grown fast over the last 2 years, mean a greater impact on buying power and levels of demand from would-be buyers. Sales are 4% above their pre-2020 levels in London. Far from being an affordable market, house prices and market activity have significantly underperformed the rest of the country since 2016. This makes the capital appear better value for money which is supporting sales.”

Even more useful is their tracking of ‘sales agreed’ by region versus the pre-pandemic years:


Additional commentary from the indices shows the vast range of price performances, making it clear that ‘national averages’ aren’t a stat that is any use to buyers and sellers and only local agents with up to date data can help them to understand whether now is a good time to sell or buy:

“Annual growth reduced most significantly in the North East, at +1.1% in February vs a rise of +3.6% in January, with homes now costing an average £163,953. Average house prices in London are now £526,842, down by -0.9% over the last year. London may be affected by its large proportion of flats – prices for which have broadly stagnated. Despite this slowdown, homes in London still cost over £240,000 more than the UK national average.”

“Since last month, the rate of growth of house prices has diminished across all areas. The largest fall was in Yorkshire and the Humber, down by 2.2% from 8.3% to 6.1%, followed by the East Midlands, down 1.6% from 10.2% to 8.6%. It is noticeable that in all areas price growth is now below 10%; the last time this was the case was in February 2022.

“The West and East Midlands remain the top two regions, as last month, at 9.1% and 8.6% respectively. The West Midlands region has been in the top two for the last seven months. In the East Midlands, three of its constituent unitary authority areas have annual price growth in excess of 10%, being the City of Nottingham (19.2%), the City of Derby (11.3%) and Nottinghamshire (10.4%).

“Greater London is the only region with negative growth, at -0.4%, although 22 of the 33 London boroughs saw prices rise on an annual basis (three more than last month). Broadly, it is the most expensive inner areas that are recording falling values - impacting seven of the top ten boroughs ranked by price.”

“On a regional basis, the annual growth rate ranges from +2.5% in London to +7.1% in Wales. The real weakness in price inflation is coming through southern England where high house prices compound the impact of higher mortgage rates on buyers.”


City/town property indices price tracking

For city/town tracking, we use Land Registry (government data) and Zoopla/Hometrack. The Land Registry data is useful because we can analyse how property prices have changed over time and this helps us to put today’s price information into context.

The Zoopla/Hometrack data is useful as they take into account the change in mix of property transactions during the pandemic to houses away from flats. This has meant the likes of the Land Registry and other indices have over exaggerated price increases year on year.


Commentary on towns and cities

Overall, out of 30 cities, since 2005, property prices have risen above inflation in all bar two – Belfast and Aberdeen. Even with the price growth seen during the pandemic, what this shows is that, in real terms, especially for those that own outright the property they have isn’t necessarily delivering from an investment perspective.

Topping the price growth charts according to Land Registry and Hometrack:

Lowest performers are:

From a best performance perspective, this varies from North to South according to Hometrack and Land Registry, but none of the cities’ ‘top performers’ overlap and the difference in price growth shows how exaggerated the Land Registry price growth is compared to Hometrack (who take into account the rise in house vs flat sales).

It’s a little more consistent on the lowest performers with Aberdeen, London and Edinburgh not seeing much growth at all. But, even the worst performers, are, in the main, in positive territory.


“In January 2023, 105 of the 110 Unitary Authority areas in England and Wales were still recording house price gains over the previous twelve months, indicating the wide extent of price rises across the two countries. The five areas which failed to record a price increase over the year were, from North to South, Hartlepool (-3.8%), Darlington (-6.7%), Rutland (-0.4%), Torfaen (-0.8%) and Windsor and Maidenhead (-1.7%). This position contrasts with Greater London, where 11 of the 33 boroughs in January were already observing declining prices over the year.

“The area with the highest annual increase in prices in January 2023, for the third month running, was Blaenau Gwent, at 30.3% growth – although this is based on only 24 properties. The second-placed authority is the City of Nottingham, with prices up by 19.2%. All property types in the City of Nottingham have seen average price increases of £13,000 or more over the last twelve months, with the average price of a detached home rising from £300k in January 2022 to £357k one year later.”

“Our index continues to show above-average house price growth in affordable regional towns next to larger employment centres covering postal areas such as Oldham, Dudley, Wolverhampton and Worcester where price inflation remains over 8%. Inner London areas continue to top the list with the weakest rates of annual price growth although no postal areas are registering year-on-year price falls at this stage.”

Download Kate Faulkner's latest property price and market report here


Demand and supply

Pretty much every index is reporting lower demand – which isn’t a surprise – but the good news of more stock means that buyers are still in the market, especially in affordable areas, and although this is one of the toughest markets for first time buyers, they definitely haven’t fallen off a cliff! 

Leaders Romans Group video: What’s really going on with the housing market?

Great to see some agent data delivered by video this year! National Sales Managing Director at LRG, Kevin Shaw gives an update on the first eight weeks of the year and explains that there are less buyers, but the quality is much higher, having five viewings to every offer they are receiving. From a supply side perspective, they are seeing instructions similar this year to last and with lower demand, this means prices have softened – but no collapse yet as well priced properties continue to see good demand.

The report from LRG is backed up by data from Chris Watkin and TwentyEA. The first chart shows that new instructions are actually slightly higher than 2022, but similar to 2018. The second chart shows that national sales agreed are down on 2018 and 19, but higher than 2017.