Realistic Pricing After the COVID Property Boom: Why Yesterday’s Price Isn’t Always Today’s Value

For anyone involved in the property market between 2020 and 2023, it is easy to understand why expectations around house prices became distorted.

The COVID property market was extraordinary.

Interest rates were exceptionally low, a Stamp Duty holiday encouraged transactions, available stock was limited and buyers suddenly placed far greater importance on gardens, home offices and additional living space. Competition became fierce and, in many areas, properties regularly attracted multiple offers.

The result was rapid house-price inflation.

But the market of 2026 is very different, and one of the most important conversations estate agents need to be having with homeowners today is about realistic pricing. Not because the housing market is collapsing. It isn't.

But because some of the prices achieved during the COVID boom were created by a very unusual combination of circumstances that no longer exists.

What actually happened to prices?

The local figures demonstrate just how dramatic the COVID period was. According to the UK House Price Index, the average property price in Folkestone and Hythe stood at approximately £253,000 in July 2020. By July 2021 it had risen to around £267,000.

Then came the major acceleration. By July 2022, the average had reached approximately £332,000, and by July 2023 it was around £336,000. Compare that with the latest available official figure. In July 2026, the average property price across Folkestone and Hythe was approximately £303,000.

That produces a fascinating picture:

Purchase point	Average price	Approx. position versus July 2026
July 2020	£253,000	+19.9%
July 2021	£267,000	+13.4%
July 2022	£332,000	-8.5%
July 2023	£336,000	-9.7%
July 2026	£303,000	—

These are area-wide averages rather than valuations of individual properties, so they should not be used to calculate the value of a particular home. But they illustrate something extremely important.

Someone who bought in 2020 or 2021 may still have a considerable cushion. Someone who bought towards the top of the market in 2022 or 2023 could be in a very different position.

Could some COVID-era buyers now be in negative equity?

Potentially, yes. But it is important to understand who is actually most at risk. Negative equity occurs when the outstanding mortgage on a property is higher than the property's current market value.

For a buyer who purchased with a 25% or 30% deposit, a 5% or 10% correction is uncomfortable, but it is unlikely on its own to create negative equity.

For somebody who bought with a 5% deposit, the maths can look very different. Take the July 2023 Folkestone and Hythe average of roughly £336,000 as a simple example.

A buyer purchasing at that price with a 5% deposit would have borrowed approximately £319,000. If a comparable property were now worth around £303,000, that buyer's original mortgage was actually greater than today's indicative property value. Of course, they will have paid some of their mortgage down since purchasing. On an illustrative 30-year repayment mortgage, depending on the interest rate, the outstanding balance after three years could still be somewhere around the £300,000 mark.

In that scenario, the owner's equity could be extremely small and, after estate agency fees, legal costs and other selling expenses, they could effectively have little or no equity available from a sale.

That does not mean every person who bought a home in 2023 is in negative equity. Far from it. Property type, exact location, condition, improvements, purchase price and original deposit all matter enormously. It does demonstrate why purchase date and loan-to-value matter.

High loan-to-value borrowing returned during the boom

Mortgage data also helps explain the potential exposure. In the final quarter of 2020, only 1.2% of gross mortgage advances were above 90% loan-to-value, partly reflecting how lenders withdrew many low-deposit products during the initial pandemic uncertainty.

By the final quarter of 2021 that figure had climbed to 4.2%.

By the final quarter of 2023, 5.5% of new mortgage advances were above 90% LTV, the highest proportion since 2019, while 39.5% of advances were above 75% LTV.

Those buyers naturally have less protection against falling values. A homeowner who begins with 40% equity can absorb a substantial movement in prices. Someone beginning with 5% equity cannot.

This is also an affordability correction

Property prices do not operate in isolation. A buyer ultimately has to be able to afford the monthly mortgage payment. That is perhaps the biggest difference between the COVID market and today's market.

The Bank of England reported that the effective rate on newly drawn mortgages reached 4.60% in August 2026. Mortgage approvals for house purchases also fell to approximately 54,900, below the previous six-month average of around 60,100.

To illustrate why this matters, a £300,000 repayment mortgage over 30 years costs approximately £1,035 per month at 1.5% interest.

At 4.6%, the same £300,000 mortgage costs approximately £1,538 per month.

That's a difference of roughly £500 every month, without the property being any bigger, better or more valuable to the buyer. This is why simply saying, “My neighbour sold for £400,000 in 2022, so mine must still be worth £400,000”, can be incredibly misleading.

The person buying today may have hundreds of pounds less disposable income each month than a buyer borrowing the same amount a few years ago. The market therefore has to adjust.

Sellers are competing with today's affordability, not yesterday's sold prices

This is where realistic pricing becomes so important. Every estate agent has seen it: a seller understandably remembers the extraordinary price achieved by a similar property during 2021 or 2022 and wants to use it as the benchmark for their own home.

But historic comparable evidence needs context.

Who bought it?

How many buyers were competing?

What interest rate could those buyers obtain?

How much similar stock was available?

Was the property sold during the Stamp Duty rush?

Was somebody relocating from London with a completely different budget?

Those factors matter.

A property is ultimately worth what the current market will pay for it, not necessarily what somebody was prepared to pay during one of the most unusual housing markets in modern history.

We shouldn't pretend the UK is experiencing another 2008

There is an equally important point to make here. Talking about negative equity does not mean predicting a housing crash. Current mortgage arrears remain relatively low. UK Finance reported 77,940 homeowner mortgages in arrears of 2.5% or more in Q2 2026, representing just 0.89% of outstanding homeowner mortgages. There were 1,150 homeowner mortgaged properties taken into possession during the quarter, with possession levels remaining significantly below their long-term average.

The Bank of England has also previously highlighted the relatively strong equity position of the wider mortgage market. Its stress testing has considered house-price falls far greater than those currently being experienced.

So this is not a story about millions of homeowners suddenly being forced to sell.

It is a story about specific cohorts being more vulnerable than others. That distinction matters.

The market is becoming increasingly price sensitive

The latest national data reinforces this. Nationwide reported that annual UK house-price growth slowed to just 0.8% in September 2026, while prices fell by 0.2% during the month on a seasonally adjusted basis. England recorded a 0.7% quarterly decline during Q3.

Official UK House Price Index data paints a similarly subdued picture in the South East, where annual growth was just 0.2% in July 2026.

Locally, Folkestone and Hythe's annual figure was slightly stronger at 0.9%, but there are major differences between property types. In the year to July 2026, semi-detached homes increased by 2.0%, while flats and maisonettes fell by 1.8%.

Nationwide's longer-term figures tell a similar story nationally. Since the beginning of 2020, the value of a typical flat has increased by around 14%, compared with approximately 31% for semi-detached homes.

There isn't one property market. Different locations and different property types are performing very differently.

The dangerous strategy is chasing the market down

For homeowners who genuinely want to move, one of the biggest risks is launching above the market because of an expectation created three or four years ago.

A property launches at £425,000 when today's buyers perceive it to be worth closer to £400,000. The first few weeks, when a listing receives its highest level of exposure, produce little interest. After six weeks the price drops to £415,000. Then £405,000. Eventually it reaches £395,000, but by that point buyers have watched it sit online for months and begin asking what is wrong with it.

Ironically, the seller who initially wanted to “try the higher price” can end up achieving less than they may have achieved by pricing correctly from day one.

Realistic pricing is not about selling somebody's home cheaply. It is about creating competition.

A correctly positioned property attracts enquiries, viewings and offers. An overpriced property often attracts portal views but very little physical activity.

And the market gives feedback very quickly.

What if you bought in 2022 or 2023?

If you bought during the peak and are considering selling now, the first step should not be panic. It should be information. Find out what your mortgage balance actually is.

Then obtain a realistic assessment of what your property would achieve in today's market, rather than relying on an automated valuation or the asking prices of neighbouring homes that haven't sold.

There is also an important difference between negative equity on paper and actually needing to realise that loss. If you do not need to move and can comfortably afford your mortgage, short-term fluctuations in property values may have very little practical relevance.

Property has always been best viewed as a medium to long-term asset.

The challenge arises for those who need to move because of a relationship breakdown, job relocation, growing family, financial pressure or another change in circumstances.

For those homeowners, understanding the numbers early is crucial.

The post-COVID market needs post-COVID expectations

The property market of 2020 to 2022 was not normal. Neither was the speed of house-price growth. Between July 2020 and July 2022 alone, the average price recorded across Folkestone and Hythe increased by approximately 31%.

Expecting that trajectory to continue indefinitely was never realistic.

The market we are operating in today is slower, more price sensitive and much more heavily influenced by mortgage affordability. That doesn't mean good homes aren't selling.

They absolutely are. But buyers are researching more carefully, comparing more properties and becoming increasingly reluctant to pay above fair market value.

For sellers, that makes the initial pricing strategy more important than ever.

At Match Estates, our job isn't simply to tell a homeowner the biggest number.

It is to look at what has actually sold, understand current buyer behaviour, analyse competing stock and position a home at a price capable of producing a result.

Because in a changing market, the best asking price isn't necessarily the highest one.

It's the one that gets you moved. Interested in selling? Give Lee a call on 01303 475085 and see how we can help!