2021 was the year of ‘a race for space’, with homeowners revaluating their home and how it met their needs. The ability to work from home or wanting to spend more time with the family, plus the appeal of low mortgage rates and stamp duty holiday savings, resulted in 1 in 16 properties exchanging hands in 2021. The huge surge in transactions and people selling a home has subsequently seen house prices increase and create a dramatic imbalance of housing supply versus demand. But, can it continue and what will happen to the market in 2022?
Here, we look at what the property experts are saying and how they feel the market will perform in 2022.
The housing market continues to defy expectations; despite the catastrophic impact the UK economy has felt from the pandemic. Average property prices were up 9.8% in 2021, that’s a steep £24,500 increase – the highest rise since 2003, with the average house now priced at £276,091.
Russell Galley, Halifax MD, says “The housing market defied expectations in 2021. We saw the average house price reach new record highs on eight occasions, despite the UK being subject to lockdown for the first six months of the year. Looking ahead, the prospect that interest rates may rise further this year to tackle rising inflation and increasing budgets suggest house price growth will slow substantially.”
The effects of the pandemic and shifts in housing preferences, makes the “outlook remain extremely uncertain”.
Robert Gardiner, Chief Economist at Nationwide, believes that the “housing market will slow in 2022”
and the Omicron variant “could reinforce the slowdown if it leads to a weaker labour market
With other factors to consider such as rising inflation, making goods and services more expensive, this could all have an adverse effect on houses coming to market. Gardiner adds, “Even if wider economic conditions remain resilient, higher interest rates are likely to exert a cooling influence. Indeed, house price growth has outpaced income growth by a significant margin over the past 18 months and, as a result, housing affordability is already less favourable than before the pandemic struck.”
The property market in 2021 has been shaped by buyer demand, with levels on average 16% higher than in 2020 and in turn seen the highest levels of sales since before the financial crisis of 2008.
Grainne Gilmore, Head of Research at Zoopla, says “Such a busy market eroded the number of homes available to buy, as properties were being snapped up so quickly. This imbalance between demand and supply has put upward pressure on prices. This uplift in equity may act as a spur for more households to consider a move in 2022.”
In December, valuation requests on Rightmove were up 19%
on the same period in 2020 and Boxing day saw the highest ever volume of traffic to the portal, suggesting homeowners could be planning an imminent move.
Tim Bannister, Director of Property Data, said: “While the pandemic is still having an ever changing impact on society as we head into the new year, we expect a housing marketing moving closer to normal during the course of 2022. A return to a less frantic market due to more choice and forecasted slightly higher interest rates, will suit many movers who have held back.”
It is expected that those who have put off moving during the past hectic 18 months, may now make the decision to get their home on the market and in turn create a “closer-to-normal market meaning a slowing pace of price rises and a better balance of supply and demand for homes.”
If the market is to regain any sense of normality, it certainly won’t happen overnight and may take many months for housing stock to level out and meet the heightened demands it faces. Sellers on average have found a buyer for their home 2 weeks faster in December 21 compared to the year before, so its fiercely competitive right now.
In the current market buyers are competing against other buyers, many who are in strong positions as they have already sold or moved into rented accommodation. This means if your finances are not in place and you aren’t in a position to proceed, you will miss out and likely to not even get through the door for a viewing.
Tim Bannister, Director of Property at Rightmove, advises to get yourself in the most proceedable and appealing position to buyers. To do this “you should become a power-buyer by making sure your current home is on the market, or preferably sold subject to contract first, before starting the search for your new home.”
How can Spring help?
Over the last 18 months during this frenzied market, we have helped many sellers become power-buyers, get ahead of the competition, and win the race to their new home.
Spring simply buys your home removing the need sell your home via the traditional estate agency route. We can complete on the sale in as little as 14 days, or a date of your choice, making you chain-free and in the best possible position to have an offer accepted on the property you want to buy.
To find out more about a Spring sale and book in a free chat with our friendly team, call us on 020 8629 7877
and let’s get you moving.