UK Property Market Roundup and Q3 and Q4 Predictions

Want to invest in UK property in 2023? Enquire today and gain access to our exclusive investment deals before anybody else.

Table of Contents

The UK property market has been incredibly active and busy during the first half of 2023, with many major events and trends becoming apparent as the year progressed.

With that in mind, it’s important to reflect on what’s changed in the past six months, as this gives us an idea of what market trends could emerge in the latter half of 2023, allowing us to predict how the property market will change over Q3 and Q4.

To help investors out with learning about these trends and predict what may emerge as we enter the second half of the year, we’ve put together this useful Market roundup.

In it, we’ll cover a roundup of the most important property market news from the first half of 2023 while making property market predictions for 2023 about what we think will happen in Q3 and Q4.

Download Your Free 2023 property Investment Guide

Enter your details below to download your free copy of our in depth guide to Liverpool property Investment

Download Your Free 2023 Liverpool Investment Guide

Enter your details below to download your free copy of our in depth guide to Liverpool property Investment


UK Property Market Roundup

Over the first six months of 2023, the UK property market has seen some major changes in terms of house price growth, rental growth and the tendencies of both buyers and sellers.

We’ll split this roundup into two parts, covering Q1 and Q2 separately before we make our UK property market predictions for 2023 and beyond.

This way, we can study what trends have emerged in the first half of the year and use them to make accurate 2023 property market predictions. If you are considering buying an investment property in 2023, then property marketing reports like this are very useful.


The first three months of 2023 began to set the tone for how the year would go in terms of house price growth, as we began to see a gradual slowing of house price growth and a month-on-month fall in house prices.

Per the Land Registry’s UK House Price Index, January saw annual house price growth slow down to 6.3%, which was a 3% drop from December 2022. The average property price was £287,274, roughly £17,000 higher than it was 12 months ago.

This would drop in February and March in terms of both annual growth and average house prices. 

February saw annual price growth slow down to 5.5%, while the national average for house prices fell to £285,648. In March, these would again gradually fall to 4.1% and £283,635 respectively.

Foot on the brake

While on paper, this may appear to be alarming, there is more to these statistics than meets the eye. 

The UK saw house prices shoot up into the stratosphere in the wake of the COVID-19 pandemic, as a flurry of transactions combined with high demand caused house prices to grow rapidly. 

House prices hit an all-time peak in November 2022, with the national average being as high as £292,674! This was naturally a bubble that had to burst at some point, and unfortunately, the rapid growth the property market had benefited from clashed with the disastrous September mini-budget and the cost of living crisis.

This meant that not only was confidence in the GBP shaky at best, but also that many were choosing to save money rather than making large purchases such as buying property.

With demand tapering off, house prices began to fall as the market reacted slowly. Asking prices fell due to this lessening demand, acting as a healthy market reset to avoid the risk of a housing market crash.

Arrow goes down in a shopping trolly

On the other side of things, the rental market thrived in Q1 of 2023, with cities seeing rising rents and high demand.

Rental inflation was over 11% for the first three months of the year, only falling by 1.2% from the end of 2022. Why not learn where to invest money to get good returns on your investment in the UK with our free resource.

This was caused by a lack of quality rental properties available on the market, as well as a level of supply that was not meeting the demand. 

This was a continuation of the past two or three years, with Zoopla reporting that annual rents have risen by an average of £2,220 in the last three years. 

While this was great news for landlords and buy to let investor types, it did threaten to clash with the cost of living crisis, as many potential tenants faced being potentially priced out of renting properties.

Major cities saw the highest levels of growth, thanks to higher levels of demand. For example, London had the lowest levels of rental supply in the country, which helped demand for rental properties to skyrocket.

Don't Miss Our Latest Deals

Units in these opportunities are selling fast. Enquire now for more details.

The Gateway

Embankment Exchange

Serviced Apartments


The next three months of 2023 saw the trend of falling house prices continue, while there was added pressure caused by rising mortgage interest rates, which even affected the rental market.

From April to June, annual house price growth once again fell slowly but steadily with no sign of growth due to the cost of living crisis and other outside factors limiting how much people could afford to spend on properties.

Annual house price growth fell from 3.5% in April to 1.7% in June, showing how the housing market was cooling off in real terms.

However, house price growth bounced back slightly from Q1 of 2023, with a national average growth of £2,536 across the country from April to June. This shows that although the market was cooling, demand for housing was still high, and the market once again proved its stability in the face of uncertainty.

Regionally, we saw a different picture for several cities in the UK. London was hit especially hard thanks to it having far higher property prices than the rest of the UK, which caused house prices to drop on both an annual growth rate and a month-by-month level.

London had the lowest annual growth in the country by far, with prices actually falling annually by 0.6%, the only area of the UK to see this happen.

On the other hand, the North East saw the highest annual growth of any English region, with an average of 4.7%.

London aerial view

Other Major UK Property Growth Factors

One major factor that hampered the potential for growth was the fact that the Bank of England had to repeatedly raise interest rates in an effort to combat the rising inflation that the UK was seeing. 

This caused lenders and mortgage brokers to raise their interest rates, which meant homeowners were paying more on their mortgage repayments, sometimes in the hundreds or even thousands.

Because of this, property in major cities became unaffordable for many due to how high-interest rates were, and in fact, many chose to leave cities like London for cheaper areas. Investing in property in the UK is still as popular now as it has ever been.

Many more chose to save their money and wait for not only mortgage rates to fall but also house prices, which contributed to the further cooling of the housing market as affordability became a major issue. 

The rental market continued to show strong signs of growth and demand because of this. As mortgage rates were so high, many were choosing to continue to rent or having to sell their homes because they couldn’t afford a mortgage, which means that the rental market continued to show strong growth.

arrow bounces up the stairs

Rents continued to rise, with them taking up the highest percentage of earnings in a decade at 28%. Rightmove reported quarterly growth of 3.5% in the rental market.

Even with this growth, the rising mortgage costs continued to have an effect as many landlords were forced to sell their properties due to not being able to afford to keep them. 51% of all landlord sales came from London and the South East, where already low rental yields meant that the extra costs were too much to bear for many.

Even with these negative signs, rental growth was still in the double digits, with Zoopla rental market data showing that year-on-year rental growth was 10.4% in June. This shows that even when the property market as a whole was showing signs of weakness and decline, the rental market remained resolute.

Hear About the Best Liverpool Property Deals Before Anybody Else

Sign Up to Our Mailing List Now

UK Property Market Predictions for 2023

With that roundup of some of the main stories to emerge from the UK property market in the first half of 2023 out of the way, let’s make some predictions for Q3 and Q4 of 2023.

We’ll break down our predictions by trends we think will either continue from earlier in the year or emerge as we come to the end of 2023.

Let’s dive into our 2023 property market predictions.

House Prices Will Continue to Fall

One major trend during the first half of 2023 was that house prices were steadily falling at a slow but steady rate. 

We believe this will continue in Q3 and Q4 of the year, as the market is not yet in a healthy enough position to warrant a return to rising house prices.

However, this is not a 2023 property market prediction of doom and gloom, but instead, a frank forecast that the housing market will hit an all-time peak in 2022 and will need to gradually calm down to avoid falling off a cliff.

If house prices slowly fall, this will allow the market to reset and stabilise while allowing potential homebuyers to afford to buy properties once again

It isn’t likely that we’ll see house prices begin to grow by any meaningful amount in Q3 or Q4 of 2023, and in fact, many industry experts believe that they will continue to fall.

One person hands out a key to another person

Savills’ forecast indicates that house prices can fall by as much as 10% across the UK by the end of the year, with some areas being affected less than others. The North West, in particular, is expected to outperform other areas of the UK, with even the worst predictions estimating prices will only fall by 8.5% in 2023. Why not learn where to invest money to get a monthly income in the UK by reading more about your investment options. 

This means that cities like Liverpool and Manchester will be ideal for property investors. Not only do they already have affordable house prices far below the national average, but they will not be hit as hard by falling house prices, which is good news for those investing in capital appreciation.

To find out more about Liverpool property investment, read our free guide on buy-to-let in Liverpool.

Why not start a chat?

Get advice on how to invest in the UK property market

Mortgage Rates Will Calm Down

When the Bank of England began raising the base rate of interest for the UK, mortgage rates quickly became unaffordable to many. 

This was part of the reason why the property market has slowed down, as thousands are choosing to save or rent over borrowing a mortgage while they wait for interest rates to drop.

The good news is that there are already signs that this is happening, and by Q4, we expect that there will be some sense of normalcy returning to mortgage interest rates – even if it is not fully back to normal.

Nationwide has already lowered its mortgage interest rates, with the Financial Times predicting that this will lead to a ‘mini-rate war’ as mortgage brokers race to lower their rates enough to entice homebuyers back to the market. 

With inflation beginning to fall, the Bank of England will likely begin to lower interest rates back down to lower levels, and mortgage brokers will be more than happy to follow to ensure they can start winning back more customers.

Coins next to house model

The Rental Market Will Reach a Peak

The rental market has had unparalleled growth in the first half of 2023, with rents continuing to rise thanks to high demand and a lack of supply.

The current wariness about buying property has benefited landlords immensely as it has led to a rise in those wanting to rent rather than buy. This is why learning how to build a property portfolio is highly recommended to make sure you make the right choices.

However, rents have been growing faster than income for months and months, and this outpacing can only go so far before the rental market also risks becoming unaffordable. This will see demand drop off and a sudden increase in landlords losing money because tenants are not living in their properties.

To avoid this, it is likely that we will see rental growth begin to slow down in Q3 and Q4 of 2023 to allow income growth to catch up.

Off-Plan Property Will Become More Viable

lightbulb with eco icons

The market has seen a strong shift towards sustainability as new regulations are introduced to ensure that properties are as energy efficient as possible in the coming years.

The implementation of the new EPC regulations in 2023 has already seen residential property developers and landlords incorporating energy-saving technologies into their designs, a clear indication of the industry’s commitment to meeting these new standards.

As the harmful effects of climate change become increasingly evident, sustainability must be a key priority for the entire property industry. Landlords who wish to continue generating rental income must have a valid EPC, making it essential to stay up-to-date with the latest regulations and take the necessary steps to ensure the long-term viability of their rental properties.

Hand adjusts EPC

The current EPC regulations require all properties to have a rating of E or above, with those who fail to meet this requirement potentially facing costly fines unless a valid exemption is registered. Despite the recent government U-turn on EPC proposals, it is still likely that legislation surrounding the energy efficiency of rental properties will become stricter in the future.

The cost of bringing an existing property up to standard can be high. However, investors who purchase off-plan or new-build properties can avoid this expense, as these properties will already be designed with energy efficiency in mind.

In fact, many off-plan developments incorporate a range of eco-saving technologies, such as solar panels, eco-friendly insulation, and smart meters. These technologies can significantly reduce energy bills and carbon emissions, making the properties more sustainable and appealing to tenants.

The demand for rental properties with eco-friendly features is increasing as more and more tenants are looking for ways to reduce their environmental impact. As a result, investors who choose to invest in off-plan properties with eco-saving technologies at the heart of their design are likely to see a higher return on their investment.

To learn more about the latest developments on offer, take a look at our comprehensive guide to off-plan property investment.

Why not read some of the RWinvest buy to let guides, we have added a small list below:

Stylish New Liverpool Investment Opportunity

Invest in The Gateway Liverpool, our hottest new development offering unique luxury onsite facilities, high rental returns and excellent capital growth potential.

Looking to Invest in 2023? Choose RWinvest

With over 18 years of experience in the buy-to-let housing market, RWInvest is one of the leading property investment firms in the UK.

Our expert sales team has a proven track record of finding investors the best investment properties for high rental yields and capital appreciation. We operate in some of the most exciting property markets in the UK, so you can be sure that your investment is in safe hands.

From finding the right property to managing your tenants, we’re here to help you get the most out of your investment. Read about some of the best long term investments in 2023 to find some inspiration with your investment choices.

If you’re interested in learning more about our range of buy-to-let properties, please contact us today. We’d be happy to answer any questions you have and help you find the perfect investment for all your needs.

And if you want to stay up-to-date on the latest developments in the UK property market, be sure to check out our blog, where we regularly post articles on topics such as the best places to invest, the latest UK property market predictions, and buy-to-let insights.

Reece Pape Property Writer

Reece Pape

Reece Pape is a property writer at RWinvest. Reece is passionate about keeping property investors updated on must-have information and housing market news, utilising the latest property market statistics and data.

RWinvest - Disclaimer
RWinvest - Disclaimer

Receive Exclusive Investment Deals Straight to Your Inbox

Sign Up to Our FREE
Mailing List Today

Enter your details below to receive exclusive RWInvest property Investment deals before anyone else! 

Chat to an Experienced
Property Agent Today

Enter your details below to get in touch with one of our experienced team today. 


Download Your FREE Guide Now!

Click the button below to get your copy.

Welcome, visitor!