Will UK House Prices Crash 2023?

Housing-Market / UK Housing Jul 24, 2023 - 10:27 AM GMT

First a reminder of some of the primary drivers for UK house prices (in order of importance).

1. Population Growth

2. Inflation courtesy of money printing.

3. Growing economy.

4. Insufficient new housing construction.

Note these are all interlinked and not independant factors i.e. you don't get population growth unless you have a growing economy as a stagnating economy results in EMIGRATION as was the case for the UK during the 1960's and 1970's as Canada and Australia hoovered up million of Brit's to populate their sparsely populated cites to ward of threats of invasion from the north (Australia) and South (Canada).

In terms of the metrics nothing much has changed since my in-depth analysis of early April 2022 (UK House Prices Trend Forecast 2022 to 2025), population continues to soar as illustrated by the latest net migration statistics that hit a a new record high of 606,000 for 2022 when the target is supposed to be 50,000! So much for Brexit!

Whilst the UK economy is weak however one only needs to look at the basket case that is France to see how much worse others are fairing. Whilst house building NEVER lives up to the political promises, coming in at near HALF the targets. Meanwhile inflation despite Rishi's tweets of coming under control remains largely out of control even under their fake CPI:LIE measure.

As I stated BEFORE inflation took off into the stratosphere that the eventual drop in CP LIE won't make any difference to the real inflation pain that people will face as illustrated by the 10 year inflation graph.

UK House Prices Trend Forecast 2022 to 2025

UK House Prices 2022 to 2025 Trend Forecast Conclusion

My expectations are for for average UK House prices (Halifax) to continue to trend higher over the next 3 years, punctuated by a brief pause during early 2023 in response to interest rate hikes, weakening economy and tax rises. However persistent high inflation, extreme over crowding and continuing strong population growth ensures that the bull market will remain in tact. Therefore my forecast conclusion is for average UK house prices (Halifax) to target a rise from £278,123 as of February 2022 over the next 3 years to £340,632 for February 2025 data (Halifax) targeting a price increase of 22.5% over 3 three years as as illustrated by my trend forecast graph below

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S&P

Targeting 4600 Mid Summer 2023.

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By Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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