what’s next: our predictions for 2023

It’s no exaggeration to say that 2022 was something of a rollercoaster. From a steady – but constant – rise in base rates to September’s disastrous mini-Budget, we were certainly kept on our toes. With that hopefully behind us, we’ve instead turned our attention to the year ahead. While we don’t have a crystal ball (unfortunately), here’s what we think will happen in 2023.


a slowdown in base rate rises

Base rates – and their continuous rise throughout 2022 – dominated last year’s headlines. After nine consecutive increases since December 2021, all eyes are on what will happen next. The first Monetary Policy Meeting of 2023 is on 2nd February and it is highly likely that the base rate may be increased again. By how much is another question, although between 4% and 4.25% seems possible. It could well be that we start to see a slowdown of consecutive increases with hikes less frequent but steeper. If that does happen, it would not be a surprise to either lenders or buyers. As we become accustomed to the idea that borrowing is going to be more expensive for the foreseeable future, prospective buyers will need to manage their expectations in relation to affordability and monthly mortgage payments.


confidence returning to the mortgage market

After the mortgage market was upended in September – which included 40% of products withdrawn in the wake of the mini-Budget – there finally seems to be a sense of stability returning to the industry as high street lenders such as Nat West start to slash rates across their residential and Buy to Let mortgage rates. This should, in turn, help to restore confidence amongst buyers as well.

There is, of course, the drop in value to contend with but considering that annual house prices in the UK rose by 8.5% in 2020 and 10.8% in 2021, any decrease will hopefully be outweighed by the previous rises. In fact, Rightmove is forecasting that the average asking price will drop by 2%, meaning prices should still remain higher than they were in 2020 and 2021.

Confidences are also set to be further raised by Prime Minister Rishi Sunak’s recent announcement that he plans to halve inflation this year. As this – coupled with the cost of living – remains a key issue, particularly as the conflict in Ukraine shows no sign of abating, getting this under control and reducing the cost of living will be crucial to how markets and lenders react in 2023.


stamp duty changes are welcome but more can be done

Here at MT Finance we have long advocated for more wholesale change to stamp duty. While the increased threshold for both first-time buyers and those looking to move onwards is welcome – despite this now only being valid until 31st March 2025 – we believe it doesn’t go far enough. Instead, we would like to see more focus on those who live in large properties and have reached an age where they would prefer a smaller home. Giving this sector of society an incentive to downsize has multiple benefits. Firstly, it would help to free up the more in-demand properties and therefore help to stabilise prices across the market due to an increased amount of desirable stock. This would also benefit those looking to get higher on the property ladder who have seen their dream homes become further and further out of reach due to spiralling costs. Secondly, it would allow the older generation to manage their finances during their retirement more effectively with savings being used as gifts or inheritance.


how MT Finance can help

At MT Finance we are here to support the landlord and investor community. Whether you need a short-term fix or a business injection, our bridging loans are fast and flexible. Terms are available of up to two years and interest retained for the full period if preferred, meaning no monthly payments. Our lack of early repayment charges means there are no financial penalties if circumstances change or you need to exit early. If you have a case that you would like to discuss, our team can be contacted online, on 0203 051 2331 or via

quick enquiry