UK Property Investment Trends 2023: A Comprehensive Guide - Property Listing

UK Property Investment Trends 2023: A Comprehensive Guide

Property Investment Trends

Historically, the UK property market has proven to be a strong and steady investment pool. However, post-pandemic conditions have offered a mixed bag of opportunities and challenges. Intrinsic factors like supply-demand imbalance and nationwide inflation, along with extrinsic influences, including changes in governmental policy and interest rates, have proven instrumental in moulding the UK Market.

So, what should you expect from the property investment trends in 2023? Here’s a comprehensive guide based on recent data and industry forecasts.

Current State of the UK Housing Market

In the wake of the pandemic, the sharp incline of UK house prices has receded, leading to a more uncertain and somewhat volatile marketplace. Fall-out from financial challenges and the rocketing prices since March 2020 have contributed to potential buyers postponing their decisions.

According to Nationwide’s data, UK house prices have recently fallen by 1.1% over the past year, representing the first annual decline in almost three years. Moreover, February marked the sixth consecutive month of decline, recording a 0.5% drop in house prices.

UK Housing Price Predictions for 2023-2027

The predicted slowing of the housing market is primarily due to the expected base rate rise in 2023-2024, subsequently causing a rise in mortgage rates. Fewer buyers will be able to afford homes, leading to a decrease in house prices.

2023 – 2024

Forecasts vary; however, Savills anticipates the base rate reaching 4% in early 2023 and remaining steady until mid-2024 before declining. Concurrently, Capital Economics predicts that by 2023, the base rate will hit a high of 5% before dropping to 4.25% in 2024.

With these projections, it’s anticipated that the high mortgage rates (around 5%) may continue to be the norm for the next two years. These rates will inevitably lead to a slowdown in the housing market. Estate agents Savills and Knight Frank predict a decline in house prices by 10% and 5% respectively in 2023.

2025 – 2026

Should mortgage lenders reduce their rates the following year, and the base rate drops from mid-2024, Savills predicts a significant 7% increase in house prices by 2026.


Statista forecasts an average house price growth of 1.7% between 2023 and 2027, with the Office for Budget Responsibility (OBR) predicting a property price increase of 3.5% in 2027.

UK Rental Market Predictions

Historically, the rental market is noted for its exciting transformations, with cities like London and Birmingham eagerly embracing innovative practices to tackle dilemmas such as housing shortages or appealing to specific market segments.

London has seen a rise in Build-to-Rent (BTR) developments. Meanwhile, in Birmingham, an innovative practice has emerged whereby entire houses are rented out to groups of students.

Despite these encouraging developments, the rental market has experienced slower demand this year, hovering at approximately 60% of the usual 95%. Nevertheless, the market remains dynamic with ongoing efforts to meet the housing demand.

Between 2023 and 2026, rents are projected to increase annually by 3 – 4%, leading to an exciting marketplace for investors. However, regional fluctuations will make specific areas more lucrative, with rental growth as low as 1% in cities like Edinburgh and Glasgow, whilst Manchester and London could rise to 6%.

The Buy-to-Let Market in the UK

The buy-to-let market has seen its fair share of pressure due to increasing mortgage rates, inflation, and legislative changes.

Stringent tax reforms, rising Stamp Duty for second homes, cuts to the allowance of capital gains tax, and the forthcoming Renters Reform Bill are examples of stricter enforcement that may deter new landlords. Consequently, landlords may find themselves at a crossroads – selling their properties or increasing rents.

But, if landlords can afford to maintain mortgage payments, then holding onto the property could prove to be a financially prudent decision in the long run, particularly with potential capital appreciation due to the UK’s perennial supply deficit of housing.


Understanding the trends of property investment is essential for investors hoping to make a success of their portfolio. This comprehensive guide provides the basis for contemplation, aiming to offer sufficient information for investors to navigate the UK Market in 2023 successfully.

In such a complex landscape, expert advice can be invaluable. For stellar guidance and market expertise, contact Reloc8 – your UK property investment guide. Their years of industry experience can help guide you smoothly around the curves of the UK market, ensuring your investments are strategically placed in profitable zones.

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