As 2021 is drawing to a close (after all we are just 4 weeks away to Christmas with 2022 almost around the corner now) it is that time of the year for all the property experts to start sharing their predictions for the year to come: will property prices rise? Or will they drop?
The UK housing market has performed exceptionally over the last 18 months, helped in part by government support, lifestyle drivers and more recently, the vaccine rollout. However, 1 of the key challenges now and still facing the market remains: a fundamental lack of available stock and a huge demand from buyers.
So the big question on everyone’s lips is: how will the market behave in 2022?
Let’s see what some of the property experts have to say.
- 3% increase in property prices according to Zoopla
Property portal Zoopla has already set out their property predictions for 2022: it forecasts a +3% increase in UK house prices over the course of 2022 (this is across a predicted 1.2 million house transactions).
Zoopla expects the house price gains seen over the past year to bring more sellers to the market in the coming months. However, a continued low supply will support price inflation. It points out that housing remains affordable in many markets, and competition among mortgage lenders will also keep rates low, leading to a continued strong appetite in the sector next year.
- Strutt & Parker forecast UK prices to grow by up to 7% in 2022, with 10% rise in prices for Prime Central London
“The current economic outlook is optimistic for the closing dates of 2021 and continuing in 2022, but the indicators are currently subject to a certain level of uncertainty as external and internal pressures may test the resilience of the UK’s path to recovery” states estate agent Strutt & Parker.
https://www.struttandparker.com/knowledge-and-research/2022-forecasts-strutt-parker
- A softer growth with prices are expected to rise by around 3.5% on average next year according to Savills
“Countryside house price growth to outstrip London and the South East for years to come”, says Savills, “as hybrid working is here to stay”. House price growth will cool off but continue its upwards trajectory for then next five years, according to Savills’ research — but the rise will be far from uniform across the country.
The ‘race for space’ that has dominated the overall picture of the housing market looks likely to have established a new normal that will last for many years to come, according to research from Savills.
Prices are expected to rise by around 3.5% on average next year, with the number of transactions in 2022 to return to normal levels after a bumper 2021, which will likely end with 1.5 million property sales having gone through, the company’s research team predict.
Yet while the number of sales will tail off, the overall story of the market looks likely to continue the trends of the past 18 months or so. The Savills figures suggest that the North-South divide will continue to close, and that housing prices in ‘prime countryside’ locations — including the Cotswolds and West Country — will outpace prices in London and the South East.
If the projections are accurate, there will be a total 5-year price growth of 18.8% in the North West and Yorkshire and Humber, far outstripping the 5.6% and 10.4% expected in London and the South East, respectively.
Even more eye-catching is the prediction that ‘UK prime regional’ prices are pencilled in for a 19.3% price growth. The exodus from city to country that has marked the market since the Covid-19 pandemic began has already pushed prices up in these areas; this is a clear indication that Savills believe the changes are here to stay, rather than a temporary change.
Here is the link to the full article recently published on CountryLife magazine: https://www.countrylife.co.uk/news/countryside-house-price-growth-to-outstrip-london-and-the-south-east-for-years-to-come-say-savills-as-hybrid-working-is-here-to-stay-234984
These are some of the very first predictions from property analysts and experts taking a brave initial punt at what the property market would be like in 2022 and beyond.
In my humble opinion it is very much too early to make predictions as the property market is seasonal; we are now on the run down to Christmas where activity slows down naturally, and this year has been particularly busy and hectic hence why there is a general and certain fatigue amongst estate agents, sellers and buyers alike!
So rather than waving a wet finger in the air and have guess at what might happen to UK house prices next year, I will patiently wait for a little while longer.
Domus Holmes Property Finder is an independent property-buying agency providing a comprehensive property search and acquisition service to clients looking to buy a home or purchase an investment property in Bristol, Bath and the South West of England (Somerset, Gloucestershire, the Cotswolds and Wiltshire.
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