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Looking Ahead to the Property Market in 2023 Posted: 22nd December 2022

It has been a challenging end to 2022, with another interest rate rise in December and mortgage rates hitting 6.5%. However, there are some positives to take away as we head into a new year.

The housing market has slowed down over the last two months as buyers hold off making plans to see what the outlook is for next year and this is in addition to the usual winter slowdown we see each Christmas and New Year.

Many forecasters predict that house prices will fall next year. Still, these projections are primarily based on expectations of high mortgage rates next year and the economic recession lasting into the following year. Zoopla has presented three reasons we should remain optimistic about the housing market next year.


When the future is uncertain, we look back at past events, and in the case of property, the most recent large-scale downturn was 2007, lasting two years when there was a 12% drop in house prices. Demand fell and, in turn, prices. Following this, banks ramped up their affordability testing so that the industry wouldn’t be in the same situation – after all, a lack of affordability checks led to the downturn.

Banks are currently subjected to regular testing against downturns in economic growth. Lenders want to make sure credit is available to those that need it next year although they will be at higher rates than we have seen in previous years. For those with a mortgage, banks are developing products to ensure they can afford the rise in mortgage rates when their fixed rate ends.


Following the mini-budget, the economy was in turmoil. However, the recent autumn statement enabled the government to calm the markets. Following this, the underlying cost of mortgages has started to back to where it was starting to move earlier in the year. The fixed rate mortgage rates for new borrowers taking a 5-year deal will be in the 4.5% to 5% range at the beginning of next year. There will be higher rates for high loan-to-value mortgages.

It’s important to remember that those who took out a mortgage over the last five years needed to show their bank they could afford a 6.5% to 7% mortgage rate. This so-called affordability stress test was designed to ensure buyers could afford higher rates.


We are still feeling the effects of the pandemic and there’s a desire for people to move to adapt to their new way of life, home working in particular. Government proposals from to make flexible working more open to employees will support this trend. The high cost of living has dampened demand but there are still buyers looking.

Whatever your reason for moving; whether it's for extra space, to downsize or you may simply have found your dream home, Nicol can help. Our knowledge of the local property market helps us develop a marketing plan that's right for you and your property.
We want our clients to be delighted with the service we provide. Listening to your needs and understanding your requirements is our starting point. To find out more about our approach to selling homes, download our comprehensive Guide to Selling your Property here.
If you are planning on selling your home, contact Nicol Estate Agents today for an appraisal of your property. Our Managing Director Douglas Nicol and Sales Manager Daniel Cohen carry out hundreds of market appraisals every year, giving them an intimate and unparalleled knowledge of the property market in Glasgow, from city centre apartments to family homes and building plots. We will talk to you about the property market in your area, compare sales evidence, local demand for similar properties, outline our tailored marketing plan and provide details of our sales support strategy right through to completion.