Number of housing transactions in the UK 2016-2023, by country
The housing market in the UK slowed in 2023, with the number of housing transactions declining across all countries. In England, which accounts for the majority of sales, the number of transactions fell to 72,410 in December 2023. That was a decrease of about 22 percent from the same period in 2022. Scotland, Wales, and Northern Ireland also experienced a decline in buying activity.
What caused the downturn?
Before 2022, mortgage rates in the UK were as low as 1.5 percent, making it possible for many homebuyers to take out a loan and buy their first house. As a result of the robust demand for housing, house prices increased steadily. As the cost of living crisis hit, the Bank of England hiked the mortgage interest rates. With house prices at their peak and a double increase in borrowing costs, many prospective homebuyers could not afford to buy and placed their plans on hold.
How will prices develop in the next five years?
After a slight decline in 2024, house prices in the UK are expected to pick up in the next year and continue on an upward trend until 2028. On average, house prices are projected to grow by 2.7 percent per year.
