According to the property specialists at 1newhomes, the current year may be a record year regarding sales. Over the last 18 months, the property market has proven buoyant due to changing work, life and property priorities across the UK during the pandemic.
We look further into the current trends, property forecasts for the year ahead including demand, house princes and market settings with all buyers in mind.
- 2021 could soon become a record year for the completion of home deals since 2007. The number could even reach as many as 1.5 million deals this year!
- The combination of changing priorities, changing work/life priorities, mortgage interest rates and previous Tax relief have all triggered and boosted the demand to new heights. As many as 22% of people have reported wishing to move from flats to houses with more indoor and outdoor space available.
- The house price growth from September 2020 to September 2021 stands at 6.6% – this means an increase against the previous challenging year. However, there are talks that the heated activity may be set to cool down as new obstacles face the property market in the UK.
Property Price Growth Since Sept 2020
Whilst the annual house price growth stood at 6.6% as of September 2021, the figure varies significantly across regional markets.
Generally, areas with affordable properties tend to see greater price growth levels. Homes in Wales became 10.4% more expensive over a 12month period, while property in North West and Northern Ireland, also outperformed other regions with 8.8% and 8.3% growth accordingly.
On a city level, the Northern regions likewise performed better in terms of the house price growth. Liverpool, Manchester, and Sheffield ranked the top three cities, the only location with a negative annual house price growth was Aberdeen; homes here in fact became 0.3% cheaper over a year.
First Time Buyers
The demand from first time property buyers has been above 30% of the 5-year average levels, since the summer of 2021. The demand from first time buyers is expected to remain high, over the next 12 months.
What has changed however, is the typical buyer profile. After the first lockdown, homeowners with premium properties dominated the market. The mortgage interest rates in 2021 brought more first time buyers to the market, returning the mix of movers to more ‘ordinary’ levels.
Insufficient stock in the property market however, cannot meet the increased demand. The recent market data shows the number of properties for sale 38% below the 5-year average. Experts expect the misbalance of demand/supply to continue pushing upward pressure on property values.
UK Market 2022 Forecasts
Moving into next year, property specialists expect both optimistic and pessimistic trends to influence the housing market.
One of the positive signs is the pandemic-related continuing race for spacious properties that will remain in 2022.
Many workers discovered the benefits of remote working that in turn, opened new perspectives. The market data reveals that 22% of people desire to move – it sharply contrasts with just 5% in the normal market settings.
Additionally, many homeowners benefitted from rising property values over the past 18 months and insufficient supply in the market will continue to heat the house prices next year.
As for the downside, the increasing living costs and potentially rising mortgage and tax rates in 2022 will affect affordable housing. By the end of 2022, the house price growth is expected to stand at 3%, with East Midlands and North West areas outperforming other regions. The weakest numbers next year are forecasted in London.
The number of deals is likewise likely to fall. It will reach 1.2m transactions, meaning a 20% decrease. However, the figure is in line with the recent average and relatively high against the past decade.
Property expert Richard Donnell expects a further pandemic impact on the property market but at “a less frenetic pace”. The market dynamics are likely to outweigh some of the emerging downsides, such as increasing costs of living and higher mortgage rates. Donnell adds that the recent data indicates a “turning point” for the house price growth rates, which are expected to slow down and reach 3% by the end of 2022.
The market has gained momentum and experts suggest this will continue well into 2022.
Those considering selling may find current market conditions favourable; the lack of supply cannot meet the heated demand. However, the very same trend might make it challenging to find a new home too.
Prospective buyers should act swiftly, when they find a home of interest.
Speak to your local Regents office, register your requirements to be the first in the know.
We suggest having your finances in place, know the options available and the next steps to take. Our mortgage adviser Craig can take care of your mortgage and insurance options.
Overall, current and future market trends seem to be more positive than negative. The heated activity is to stay but might ease as we head well into next year.