Investing in property has long been a good investment, and often such a venture is considered much more lucrative and promising than other types of investment.
Despite the uncertainty brought about by Brexit and the COVID-19 pandemic, the UK housing market has remained incredibly strong, especially in cities, attracting attention from across the globe.
Yet, what does 2022 look like for the property market? 2021 has taught us many lessons in unpredictability and the unforeseen, yet when it comes to housing prices, what goes up may not necessarily go down. Below, we will be discussing the property market in 2021, what is happening in the present and what is predicted for 2022.
What Happened in 2021?
2021 was a bumper year for the UK property market after a frenzied purchasing activity pushed prices to a record high.
With the government stamp duty holiday ending in 2021, this helped to push through 1.5m house purchases across the UK; the record highest number since before the 2007-2008 global financial crisis.
What’s more, with huge changes in the workplace for many, and a wide range of companies deciding to become a lot more flexible with working arrangements, this prompted homeowners to choose to relocate.
In fact, the trade association UK Finance reported that 2021 was the strongest year they have had for mortgage lending since 2007. It has been estimated that £316bn of home loans were accepted, which is the highest figure seen since 14 years ago when £357bn was recorded.
What’s Happening Now?
As of January 2022, housing prices are continuing to go up, despite warnings given by the Bank of England back in May 2020 of a potential 16% fall in property prices. The housing market has defied all odds and is, quite frankly, thriving.
In fact, the average house price in the UK hit a new record high in December, of £254,822, according to Nationwide. This is a 10.4% increase over the year, and the largest annual increase the market has seen since 2006.
There’s no denying it, housing prices will be more than they were 12 months ago, yet mortgage rates are still low, despite the Bank of England increasing the interest rates from 0.1% to 0.25%.
Whether you’re buying or selling, in the current climate now is a good time to lean on the help and knowledge of experts. As time passes, rising rates could potentially hit the housing market and make it more expensive to borrow money, and harder to find a cheap mortgage deal.
An expert will be able to either assist you in selling your previous property, give you advice in regards to purchasing, or even perhaps both.
Yet, as with any expert, of course, it’s important to have the peace of mind that you are getting trustworthy and reliable advice. In the UK, many will have professional indemnity insurance for estate agents. Therefore, in the event that you, unfortunately, receive wrong advice, then you may be able to rely on their cover to claim back suitable damages.
What’s Predicted for 2022?
So far, there have been signs of a ‘closer to normal’ market coming for 2022; albeit still busy. Property valuation requests have increased hugely, which is a great sign that homes will be on the market to supply the demand.
Towards the end of 2021, whilst COVID was still creating an ever-changing impact, signs of traditional normalities were returning, including seasonal fluctuations in housing prices. We saw a dip in asking prices in December, which is typical as many home-hunters decide to put things on the back-burner until Christmas has passed.
2022 will also remain a strong seller’s market. Therefore, should you decide to sell, the chances of finding a buyer will be incredibly high. In fact, there are still huge levels of buyer demand and not enough homes on the market to fulfil this.
Despite a seasonal dip in December, asking prices are also predicted to rise by 5% in 2022, however, the right asking price will still be key as buyers will have limited options as to what they can afford or are prepared to pay for a house.
Yet, from a more long-term viewpoint, Zoopla’s director of research expects house sales to edge down as the UK continues to emerge from the impact of the pandemic, and housing transactions to decline by 20%. Furthermore, they have expected house price growth to be 3% by the end of 2022, with the highest growth predicted for the East Midlands and North-West England.
To further instil that 2022 marks a change for the housing market, Savills Head of Residential Research has stated that 2021 was a remarkable year and that it will be difficult to reproduce these market conditions throughout 2022.
