UK Housing Market Predictions 2022

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UK Housing Market Predictions 2022

The housing market has shown exponential growth over the last 18 months. The fallout from the COVID-19 pandemic, furlough scheme, stamp duty holiday and low mortgage rates have all been contributing factors to the record highs of house sales.

With 22% of households remaining “eager” or “very eager” to move home as a direct result of the pandemic over the next 18 months, can we expect the same trends in 2022 for the UK housing market?

Here are the UK housing market predictions for 2022:

Average UK house price:

According to Halifax the average home in the UK is now worth £20,000 more than it did a year ago. The North West in particular saw huge increases in average house prices by up to 12.4%.

In 2022 there will likely be a smaller but consistent rise in UK property prices.

Research indicates house prices in the UK are expected to rise between 3 and 4% over the year. With the likes of Manchester rising 8.7%.

Supply and Demand

The Stamp duty holiday from 2021 exempted tax on the first £500,000 of the purchase price of the home between July 2020 and June 2021. As a result, this caused an artificial rush in property purchasing. In 2022 there will be slowed down activity but still a high demand for property.

Recent research states that estate agent listings have dropped by over half. Supply is at an all-time low while demand continues to steadily rise for property.

House price growth will continue to increase as a result of demand outstripping supply.

What buyers are looking for

House prices aren’t the only thing that the pandemic has affected in the property market. The requirements of those looking to buy have changed as a result.

Spending more time at home, including working from home has changed what people want from their residence.

Outdoor space is now the most important factor for buyers. Followed closely by broadband/mobile connectivity and square footage.

This shake-up of buyer-behaviour norms is set to be carried through into 2022.

As more offices finalise their office policy paired with the uncertainty of the new Omicron variant, buyers will continue to re-evaluate what they need from their homes.

With the ‘new normal’ hybrid working is very much expected, buyers will continue to look for an extra room to use as a home office and property with outdoor space.

Mortgage expectations

The Bank of England has just voted on an interest rate increase to guard against further inflation increases. The interest rate has now risen from 0.1% to 0.25%.

For those looking to secure a mortgage in 2022, with the cost of borrowing up, this will directly affect mortgage rates.

With interest rates increasing and property prices rising, it’s expected that it will be harder for first-time buyers to get onto the property ladder.

The government mortgage guarantee scheme is running throughout 2022 with big mortgage lenders signing up to the scheme to offer mortgage deals to those with small 5% deposits.

The Rental Market

As a result of an increase in property prices, low supply and the ending of the furlough scheme, it is likely that the 2022 rental market will continue to grow with rentals now being cheaper than buying (outside large deposits).

Increased rental demand will show a further increase in rental prices, with supply and demand issues replicating those seen in the property market.

The private rented sector could have impacts on the market post-2022, as the millennial/Gen Z emerge as generations renting by choice in favour of an outgoing lifestyle rather than saving for home a deposit.

If you’re one of the 22% of households looking to move in 2022, homes4u can help you along the way. With an extensive offering of new homes, we offer honest and professional advice at every step of the process to help you secure the perfect property.

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