Gill’s Predictions for the UK Property Market 2022
Want to know what will happen to the UK property market in 2022? Take a lok at our CEO Gill Fielding’s predictions…
Well, 2021 was a very busy year for property transactions with 1 in 16 houses being bought or sold and the indications are that the activity will continue into 2022. Many people struggled to find properties either to buy or to rent due to so few properties coming to market.
We also saw some of the largest month on month price rises and the overall annual increase in property prices has been over 10% for much of the year.
Going forward, these are my top 5 predictions for the UK property market 2022:
1.Transaction levels will continue at least at 2021 levels and a Zoopla survey recently recorded that 22% of people are eager or very eager to move in 2022. That’s 1 in 5 properties potentially on the move! People will continue to move partly as a covid lifestyle choice.
In addition, there is a backlog of people and properties that couldn’t move during 2021 that will gradually get moving in 2022.
2. Prices will continue to rise partly as a result of these latent transactions but also because of the increasing demand for properties whilst supply is low. Supply will remain relatively low in 2022 due to restricted building and shortages of building supplies and labour force.
3. The government will persist with its policy to ‘level up’ and will continue to encourage large employers, including themselves, to re-locate in the north. This will mean that property prices in the north will be particularly buoyant and are likely to rise more quickly than those in the south.
4. There will be a small rise in interest rates at some stage in the year. Exactly when will depend on how the economy reacts to the whatever the latest Covid news is and it either slows down or picks up. This will impact the inflation rate, which is already predicted to be 4% in 2022 and that will result in an interest rate rise. It makes sense to fix any mortgages as soon as possible before rates are increased.
5. Property will become more environmentally friendly during the year. We have already seen the introduction of some initiatives particularly for new build housing and in EPC requirements for investment properties and the ‘eco train’ is only going to increase speed in the next few years. Although not many of the requirements are law yet it makes sense to buy properties now that will comply with forthcoming eco legislation or face substantial conversion or upgrade costs in the near future.
Overall, the property market appears to be immune to Covid and during the last 12 months prices have risen at a faster rate than any other year in the last decade. This is as a result of lifestyle changes due to Covid combined with low interest rates and finance costs. This isn’t going to change very much in 2022 although finance costs will rise a little when the expected base rate increase happens.
People will be equally keen to move home in 2022 as many will have been forced to stay put in 2021 due to lack of suitable properties. Many people have been saving money (approximately £250 billion apparently) which will form sizeable deposits when needed.
Finally, for property investors there will be greater demand for any properties than we have seen in recent history. Rents have risen at their fastest rate since before the property crisis of 2008. Demand is high and property is a great place for all those lockdown savings.
I’m looking forward to an exciting 2022.
If you would like to find out more about investing in property in 2022, check out our award-winning property investing training.