House Price Predictions 2022

House Price Predictions 2022

House price predictions 2022

What are the experts saying?

The Greek philosopher, Heraclitus, said that change is the only constant in life. This is always true of the property market as it never stays the same for long. So, despite the housing market continuing to boom during the pandemic, what will prices do in 2022 according to the experts?

The general take-home seems to be that house prices will continue to grow strongly, if not quite at the record levels we’ve been seeing recently as activity and demand have soared.

Property firm Zoopla, for example, predicts that prices will grow by 3% across 2022 – down from annual price growth of 6.6% in September 2021 but still relatively strong, following on from what has been a record year for sales transactions.

This means good news for sellers, as demand continues to outstrip supply, but not such good news for buyers expecting a significant dip in prices. Low housing stock, as ever, will lead to increasing prices, albeit at a slower rate than in 2021.

Long term trend

The long-term trend in the property market has always been for prices to rise in spite of bumps in the road along the way. This makes perfect sense given that the UK’s economy is property driven.

When there is plenty of activity in the housing market, everything else falls into place. People buying and selling need new furniture, kitchens, bathrooms, flooring, DIY equipment, wallpaper, building materials and garden furniture to name a few. That keeps the wheels of industry turning and people in jobs.

As such, all governments want and need a buoyant property market, and its role as a multiplier was one of the major reasons the housing market was one of the first major industries to reopen after the first lockdown last year.

The double whammy of both the stamp duty holiday and furlough scheme ending on 30 September 2021 did not have a major effect.  The feared cliff edges never materialised. Instead, both were baked in and activity has remained strong ever since, with no worrying spike in unemployment as a result of furlough coming to a close.

Buyer demand

Zoopla’s research indicates that demand from potential buyers will remain strong into 2022.  Working from home is likely here to stay for many and buyers continue to look further afield – often to coastal locations – as a result of this. At present, some 22% of people are considering moving compared with only 5% pre-pandemic.

Savills echoes these sentiments. The property consultancy forecasts that house prices in the UK will increase by 3.5% in 2022 due to robust economic growth and a shortage of homes, in a slight slowdown of current price trends.

The firm recently released its five-year house price forecast. It put house price growth in 2023 at 3%, followed by 2.5% in 2024, 2% in 2025 and 1.5% in 2026 – potentially meaning UK house prices could rise by 13.1% by 2026. Significant growth, but still smaller than the growth experienced in the 16 or so months since the property market reopened in May 2020. This just shows how sensationally the market has performed during COVID-19.

Housing transactions

Housing transactions are anticipated to fall back to normal post-global financial crisis levels next year, having hit a high of 1.5 million in 2021. There is expected to be 1.24 million of transactions in 2022, declining gradually to 1.09 million from 2024 onwards.

According to Rightmove, the number of people browsing properties on Boxing Day last year was over 50% higher than the previous year.  A similar scenario is expected this December with momentum continuing into 2022, pushing prices higher. The portal has previously predicted that the likely interest rate rise later this year or early next year will slow the housing market but not stop its momentum.

Tim Bannister, Rightmove’s director of property data, commented: “Although more properties are coming to market, the level is still not enough to replenish the stock that’s being snapped up.

“The stock shortages started after the first lockdown, and they look set to continue with the underlying housing market fundamentals remaining strong, and an additional incentive to buy and fix your mortgage interest rate before a widely expected rate rise.

“Mortgage interest rates are lower than they have ever been before and lenders are keen to lend in a competitive market, with employment and wage growth also robust. The number of sales agreed continue to be strong despite the end of the stamp duty incentives.”

The Financial Times, meanwhile, reports that what happens to prices next year will depend on the extent of any interest rate rises and on how a property shortage and healthy employment market will exert pressure.

Strong year ahead

If recent years are anything to go by, next year should be another strong year for sellers. Reuters reports that data from the Bank of England, adjusted for inflation, shows house prices in Britain have grown since 1980 by more than in almost any other advanced economy.

Predicting property prices, when they are subject to so many external forces and opinions, is far from an exact science. Although it is difficult to find a consensus, all the signs are that next year will continue to be a positive one for house price growth. This should put sellers in a strong position when it comes to selling and negotiating on asking prices.

Brighton & Hove has long-drawn people fed up with London life, and this trend exploded during the pandemic as people sought more space, easier access to greenery, and a slower pace of life by the coast.

Here at Callaways Estate Agents, whether it’s beach huts or smart coastal homes you are looking to sell, we will do all we can to help you complete a smooth house sale. We operate across the South Coast, including in Falmer, Worthing and Brighton & Hove, and have the experience and know-how of the local area to help you set the right price and attract the best kind of buyers.

For more info about what we can offer, please get in touch with us today. You can also get a free, instant online valuation of your home, to give you an idea of how much it could cost, by clicking here.