Buying a House in 2023 with Current Mortgage Rates UK

Is it a Good Idea to Buy Property in 2023?

Due to the current mortgage rates, UK house price growth has slowed and even dropped in some regions. Current average mortgage rates for the UK sit at 5.73% for a five-year fixed mortgage. While high, this however means lower competition and lower prices for property investors.

The current rate has seen a drop of 0.42% from the height of the Base Rate this summer. The overall annual house price growth is 0.1% to counteract inflation and the higher rates.

The shock over current mortgage rates in the UK is due to the sudden rise over the summer. The property market was used to some of the lowest rates the country has had, with most FTBs even purchasing three-bedroom homes during this time.

Between 1995 and 2022, the average mortgage interest rate was 5.62%. With current mortgage rates only slightly above this UK average, the rates we are now experiencing are the norm. It has, however, been due to the velocity of the increase that caught the market and buyers off-guard. This, plus the imbalance of the cost of living and income, still has people understandably concerned about buying a house in 2023.

Purchase a BMV Property

A below-market value (BMV) property can have been on the market for a long time or is, more commonly, from motivated sellers who want a quick sale. These properties are below their market price, hence the name. BMVs can be useful for investors cash buying or wanting smaller investments to grow their property portfolios.

With much lower purchase prices than their average seen on the market, BMV properties offer rental yields much higher than the national average. This can grow in popularity for those buying a house in 2023. Property sourcing for such opportunities can see prices £10k, £20k, or even £40k less than their market value. Even with the current mortgage rates in the UK, properties like these can present investors with fantastic returns.