The UK’s housing market is predicted to return to standard activity levels in 2022 following a harried 18 months. According to Rightmove, the new year will be accompanied by a stronger balance between buyer and seller demand due to an increased number of property owners looking to sell and higher interest rates.
Rightmove’s director of property data, Tim Bannister, advised that higher interest rates will assist “a slowing of the fast pace of sales, and associated pace of price rises” and help return the market to normality. Buyer numbers have increased by 41% in 2019 and 3% in 2020.
Housing prices are predicted to increase by 5% on a national level in 2022, reducing the ‘pricing power’ of sellers with an improved selection of properties available and increased affordability for buyers.
The market has experienced its normal “December decrease” during the past month, with the average asking price for property decreasing by 0.7%. However, this general UK figure does not reflect deviations from different regions – in London and Scotland, asking prices have decreased between 1.6% and 3-5%, while in East and West Midlands they increased up to 1.6%.
UK Finance, the bank trade body, said that 2021 would be a record year for mortgage lending peaking at £316bn – up 30% on 2020 – then decreasing to £281bn in 2022 before increasing to £313bn in 2023.
Figures released by Halifax indicate that the average UK property prices have risen by 3.4% over the past three months, indicating the highest quarterly rate since late 2006.
Requests received by estate agents from property owners on property sale websites increased by 19% in the past year, suggesting that “more people will be making a new year resolution to move”.
The housing market has been driven by the stamp duty holiday introduced by the government in July 2020 helping to increase prices alongside government guarantees for mortgages and a new desired lifestyle brought about by the pandemic with many buyers seeking larger gardens and rooms to accommodate working remotely.
The average asking price is now £340,167 in comparison with £342,401 a month ago, with the annual rate of price growth unchanged at 6.3%, said Rightmove.
