The last time you heard from us, things were looking bleak. January’s deep dive was packed with gloomy predictions about double-digit price falls and a slowdown in transaction numbers.

However, two months is a long time in conveyancing and things are looking a little brighter as we head towards the end of March. After five months of successive price falls, January brought a 0.2% rise in prices. So were predictions of a mini-crash greatly overstated? And has the housing market begun to stabilise?

The Good News

First of all, it’s important to establish that the housing market remains in decline (for now) but less precipitously than we all thought a few months ago. 

A new survey from RICS reveals a rise in new buyer enquiries. It showed a net balance of -29% last month, which might not sound like much but represents a 16% increase on January’s figures. It’s also worth bearing in mind that this is the smallest decline since last summer, perhaps representing the first green shoots of recovery. 

Meanwhile, Rightmove has reported that the number of buyers contacting agents increased by 11% in late February. And, the number of sales agreed was just 11% lower than the pre-pandemic watermark of February 2019. When you consider that in January, sales were down by 15 or even 20% in some places, this represents some, albeit tentative progress. 

What’s more, the average price of a property sat at £285,476 during February, up from £282,360 in January. The annual percentage change in prices also remained at +2.1% for the third month in a row.

There’s even some good news on interest rates. The Bank of England’s Governor, Andrew Bailey was quoted in early March as saying that interest rates may now top out at 4.5%, substantially below the 6 or 7% many were predicting at the turn of the year. This could have a huge impact on buyer demand, not to mention those already in properties who are struggling. 

All in all, these are healthy signs. Progress is likely to be slow as the market begins to correct itself. Nevertheless, without wishing to make too bold a prediction, it looks as though we’re some way from the worst-case scenario.

Things to Be Wary Of

Unfortunately, there are a few caveats to the above positivity. First up, we need to talk about the UK economy. Although the UK appears to have dodged a full-blown recession, things are not good. Britain’s economy is still forecast to shrink by 1.4% in 2023 and inflation remains at 11%. The housing market has remained remarkably resilient in the face of this. However, the old cliche that property prices follow the cycles of the economy is a cliche for a reason. And we’re unlikely to see the housing market recover meaningfully until the economy does too.

We also need to discuss the spectre of bank runs. If you’ve paid attention to the news cycle at all this month, you’ll have no doubt heard about the collapse of Silicon Valley Bank and Credit Suisse. Although neither incident poses any real threat to the UK economy at the moment, some experts are worried about potential unrealised losses lurking in the investment portfolios of European banks.

If this is the case, it could spell trouble for the UK. Consumers need confidence that their money is safe with their bank of choice. Anything else sparks a crisis in consumer confidence and can cause customers to panic and pull their cash – otherwise known as a bank run. In theory, the UK, with its large well-capitalised banks, should be relatively immune from this, but the threat still exists. Think back to the fall of Nothern Rock in 2007 for an example of what this could mean.

This is important for the housing market for two reasons. First, a crisis in consumer confidence could destabilise an already wounded economy. And, as we’ve already discussed, an unhealthy economy rarely means good things for housing. Second, a lack of consumer confidence means fewer people willing to borrow large amounts of capital from banks to purchase a property. After all, would you take a 30-year loan from an institution you didn’t trust?

Of course, for the moment, this is all largely theoretical. The UK banking system is not the US, or even the European, model and should be much more resilient to the threat. But it is a storm cloud on the horizon to be aware of.

Lastly, and this is a drum we’ll keep banging, the UK needs to do something about the lack of new housing stock being built. A huge number of first-time buyers remain effectively locked out of the market, due to low supply. Long-term this represents a brake on the health of the housing market. The pattern in recent years of growth fueled by ever-rising asset prices is, by definition, unsustainable. 

It’s clear that, for the long-term health of the industry, we need a more considered form of growth. One that caters to buyers in every sector of the market. After all, the first-time buyers of today are the upsizers and second-home buyers of tomorrow. 


Time to draw some conclusions. Although the housing market isn’t out of the woods yet, there are signs that we’re moving towards a slower, more methodical market. Provided the external shocks we’ve mentioned don’t turn into anything more than worries, this should prove stabilising in the long term. 

And a more stable market is fundamentally a very good thing. True, we won’t have the dizzying highs of the last few years, but we’ll also avoid the lows and, hopefully, create a more equitable property market in the process.