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According to the latest data from Nationwide, the start of 2023 saw a further slowing in annual house price growth to 1.1% from 2.8% in December. Indeed, January saw a further monthly price fall (-0.6%), which left prices 3.2% lower than their August peak (after adjusting the data for seasonality). Still, Nationwide suggest that the market may be turning a corner. 

They cite that mortgage rates seem to be ‘normalising’, but it is too early to see in the data if activity in the market has started to recover. They foresee that if mortgage rates continue to fall and incomes rise, this should help improve the affordability position for potential buyers. However, the impact may be fairly modest given that many would-be homeowners are currently having to deal with high levels of rent.

“In Harrow, the average price of a two-bedroom house is £400,000, compared with £610,000 for three bedrooms”

Yet there is another factor at play in the housing market which means now might be the perfect time to buy a property. When house prices start to increase again, the difference in prices between one, two, three and four-bedroom properties grows as well, but not uniformly. When prices rise, the prices of larger homes increase at a disproportionately faster rate. This makes it harder to upsize. 
In Harrow, the average price of a two-bedroom house is £400,000, compared with £610,000 for three bedrooms. When prices start to rise again, those selling a two-bedroom home to buy a three-bed home will find that the uplift in the value of the home they are selling does not match the rise in the price of the home they're trying to buy.