Where is the Best Place to Invest in Property in 2023?

Overall, housing prices in the UK have been plagued by a lack of buyer confidence and rising inflation rates.

Savills predicts that this year, we'll see consumer confidence drop as we enter into a period of shallow recession, evidenced by the fourth consecutive month in housing price falls. However, there are some areas in the UK resisting this trend.

We'll discuss a few areas ripe for investment this year:

Which areas are doing Badly?

According to national statistics, at the end of 2022's last quarter, the average UK property price was £294,910. While overall, this was more than 10% up from the previous year, the slow decline at the end of 2022 suggests the UK will see prices fall dramatically in 2023. In fact, some estimate that capital value will drop by 10% this year.

However, as these figures cover the whole of the UK, the growth and fall of housing prices in specific areas can be masked. For instance, England has maintained significantly higher average house prices than Wales, Scotland and Northern Ireland. Whereas England had an average house price of £315,073 in Q4 of 2022, Northern Ireland sat at £176,131.

This becomes even more evident as we look at regional housing prices. As an overview:

  • London properties are set to have the most substantial fall in value during 2023, close to -13% (3 points different from the national average above). Moreover, overall growth in the next five years will fall far behind the rest of the UK, as we will see that 2027 will still leave London with a 1.7% property value decline.
  • The South East and East of England are not too far behind, shoring up for a value drop of -11% in 2023, with a marginal recovery of only 3% by 2027.
Which areas have had the Most Substantial Growth?

In contrast, the areas with the highest forecasts for growth for 2023 and beyond are:
  • North Norfolk, Argyll, and Bute, whose prices remained at a robust 21.4% and 19.7%, respectively, during the 2022 downturn.
  • Overall, the North West and North East will see a significant rise in capital value over the next five years. In fact, out of all UK regions, they will reach the highest scores with an 11.7% increase.
  • A little below them in Scotland, with a prediction of value growth of 9.5% over the next 5 years.

As we’ve discussed, though, the UK will see an overall decline in consumer confidence and an emerging shallow recession in the coming months, some areas in the UK are withstanding this trend. As a result, these areas might be a promising deviation from general trends for real estate and property investors looking to expand their portfolios this year.

However, having the right tools to make your own analysis is essential. For example, free mid-term inspection software or other comparative measures allow you to better judge your properties' status.

To learn more, look at some of our property tech guides.

Panos, 31 March 2023
Where is the Best Place to Invest in Property in 2023?

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