2022 marks a new chapter for the UK property market as the world slowly returns to an idea of ‘normal’ two years after the on-set of the Covid-19 pandemic. While the last few years have seen an uptick in property sales due to the Covid-related stamp duty holiday (which helped to fuel about 1.5 million house purchases across the UK in 2021) the financial forecast looks as though things are slowly but surely returning to pre-Covid levels.
Here’s what else we can expect in 2022:
Less price growth overall
Despite reaching record highs in 2020 and 2021, house prices are unlikely to sustainably grow at the rate of the last few years and will start slowing down.
Pandemic-inspired moves and lifestyle changes, a strong economic recovery, ultra-low interest rates and the stamp duty holiday caused a surge in demand over the last two years and due to a lack of supply, house prices soared. A better balance of supply and demand for homes in 2022 means a natural slowing in the pace of price rises can be expected, and this stability is welcomed, since prices can't continue to grow at the rate they have been doing. A more stable rate of growth is then going to lead to more market sustainability going forward.
Though supply is still low at the moment
Early numbers indicate that the supply of property coming on to the market for sale will increase in the coming weeks now that the latest Covid restrictions are being lifted, but current supply numbers are low. The number of buyers expressing interest about homes is 15% higher than a year ago, but the number of available homes for sale per estate agency branch has continued to drop.
Rising UK mortgage rates will affect demand
According to forecasts, UK mortgage rates will rise again as the Bank of England attempts to tackle rising prices across the board. While rates have stayed low since the on-set of the pandemic, the Bank of England increased its base rate from 0.1% to 0.5%, and similar
Increases are expected in the coming months in an attempt to curb rising inflation.
A return to cities
Despite a covid-era trend of buyers heading out of cities for the country over the last two years, the latest numbers indicate that the migration might be switching directions as office re-open nationwide. While areas like Yorkshire, Northumberland and Cornwall saw a surge of interest during the pandemic, major areas like London, Birmingham and Manchester are experience increased levels of interest from buyers.
With a new year ahead and an-ever changing market proving difficult to navigate, there’s never been a better time to consult with Tailor my Property’s expert network of brokers, advisors and financial experts to assist you with all things UK property in 2022.