With the average prices of houses in the UK reaching an all-time high in 2021, buyers, sellers and estate agents are curious to see what the future holds. Will the prices continue to rise drastically, will the real estate market in the UK slow down or will the supply finally match up to the demand? One reason for the drastic increase in the average price of property in 2021 was the introduction of the stamp duty holiday. Now that the stamp duty holiday no longer exists, will the real estate market suffer? Or, has the introduction of the stamp duty holiday coupled with low-interest rates already started the momentum for ever-increasing property prices? This is what the experts have predicted for the UK property market in 2022.
Will prices go up in 2022?
Rightmove has predicted that the average price of houses in the UK will rise by 5 per cent in the year 2022. According to Halifax, the average price of houses in the UK has risen by 3.4 per cent from September to November, which is supposed to be the highest rise the UK market has seen in one quarter since 2006. Experts at Nationwide claim that the prices continued to climb in November 2021, hence leading to a 10 per cent increase in the average price of property from November 2020 to November 2021. However, most experts believe that the increasing number of homeowners who are looking to sell coupled with the number of new developments and ongoing housing projects in the UK housing market will reduce the burden on the buyer in 2022.
Assuming that the average asking price in the UK will rise by 5 per cent, that means the asking price for homes in 2022 will increase by approximately £17,000. According to Rightmove, there has been a 19 per cent increase in the number of people asking for a free house valuation in the month of November 2021, when compared to the figures of November 2020. As more and more buyers and sellers enter the housing market, the pace by which the price is rising might increase. However, most experts believe that the average price of property will continue to rise in the UK in 2022.
What is the future of the UK property market?
Most experts believe that the UK property market in 2022 will be more ’normal’ as compared to 2021, but property prices will continue to stay on the rise. With strong buyer demand in 2021, experts believe that this demand will carry forward in 2022 also. With the number of homeowners who are ready to sell their property, the supply might catch up to the demand. Essentially, experts feel that the UK property market in 2022 will not be as ‘frenetic’ as the property market in 2021.
On the other hand, the UK property market has experienced the ‘December dip’, which is pretty normal for most housing markets around the world. In the UK, the average price of property has fallen by 0.7 per cent around the holidays. In London itself, the average asking price has fallen by 1.6 per cent whereas in Scotland it has fallen by a whopping 3.5 per cent. Alternatively, in the East and West Midlands, the average asking price has risen by 1.6 per cent.
Will the buyer demand change in 2022?
According to the data, the number of homeowners who have asked estate agents to value their homes has increased by 19 per cent since last year. That makes experts believe that a lot of homeowners are thinking about putting their homes on the market either during or after the holidays. One reason for this is the Covid-19 pandemic coupled with the concept of work from home. Now that people are forced to stay inside their homes, they are looking to upgrade their homes and their lifestyles. For most homeowners, this means moving into bigger and better homes. Also, since most professionals are now working from home, they no longer need to commute to their place of work. Due to this, many young professionals are making the shift from the city to the boroughs. Keeping in mind that the average price of property in the suburbs and boroughs is much lower than the average price of property in the city, potential buyers and homeowners are looking to move into bigger homes in the outskirts.
Which regions will see the maximum price growth?
The West Midlands, the South West England and the Humber are the areas that will likely see the most price growth in 2022. According to the predictions, these areas will see significant price growth in 2022, with prices rising as much as 7 per cent. Some experts predict that the average price of houses in London will also increase by 3 per cent in the coming year.
Reference
https://www.buyassociation.co.uk/2021/12/03/uk-housing-market-predictions-2022/
https://www.rightmove.co.uk/news/articles/property-news/house-price-forecast-2022/
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