[Published Dec 2021] I look back at 2021’s housing market and share some predictions for 2022.
Everyone loves a forecast, especially when it’s about good times ahead.
Whether we like it or not the unknowns of the Omicron variant put a question mark over early 2022 – about the housing market, our freedoms and responsibilities. There’s little point speculating but it’s key to remember that events can derail plans and predictions.
Even so, let’s see what we at least think the market will do in the year ahead.
Buyers, sellers and those staying put
Zoopla says that by the year-end 1 home in every 16 in the UK will have changed hands in 2021 – an amazing statistic! Much of that was down to the stamp duty holiday which is now in the past but all that momentum won’t come to a dead stop.
Analysts at Rightmove are amongst many in the property business who say house prices will rise around five per cent on average in 2022, with the ‘race for space’ still being an important influence. So London will lag behind a little and other areas – Scotland, the South West and Yorkshire in particular – are set to see larger increases.
It’s worth remembering that we’ve just seen one of the busiest years in the housing market for a decade, despite the pandemic – so even if Omicron does bite, there’s every reason to believe people will still want to get that dream home, perhaps even quicker than planned.
And one other Omicron point: it may be that interest rate rises anticipated before Christmas or in early 2022 may be delayed while the Bank of England sees how the wider economy is coping with the fall-out of the new variant.
First-time buyers
It’s never easy being a first time buyer after strong house price rises but it’s not all bad news. Low-deposit mortgages for FTBs with as little as five per cent deposit have become cheaper over recent months and finance experts predict they will carry over into 2022.
Some of this is down to the government’s mortgage guarantee scheme, launched in April and continuing all next year; some is also down to the economy performing better-than-expected during the pandemic, so lenders are competing to win FTB business.
My advice, though, is to act sooner rather than later – some of today’s deals may end if interest rates do rise later in 2022.
Landlords
Wherever you look, it’s clear that the rental market is on fire right now – an early Christmas present for landlords, if not for tenants.
One of the top indices, Goodlord, says rents are now 8% higher on average than in late 2020, with other measures such as vacant properties and speed of letting all suggesting a hot market with demand exceeding supply. Larger rental properties are seeing bigger rises than flats and apartments – another Covid phenomenon.
As with the sales market, all of these characteristics are expected to remain in place for the foreseeable future in the lettings sector.
Tenants
What’s good for landlords – rent rises and high demand – tends to be bad news for tenants, but there’s good news coming in the early part of 2022.
The government is to release a long-awaited White Paper which will fire the starting gun on a revolution in renting. It will propose new deposits which can be carried over from one property to another (making it cheaper and easier for tenants to move home), plus greater protections for renters when landlords sell their properties.
These changes won’t come overnight but the whole rental sector will come under wider scrutiny in 2022. Watch this space!
Holiday homeowners
The word ’staycation’ is now part of our everyday lives – but that’s been a mixed blessing for anyone owning a holiday home. Of course values have rocketed during 2021 (by just over 20 per cent in Cornwall’s beautiful Padstow, for example) and anyone letting through Airbnb or on the longer term rental market has seen strong returns.
But the tide is turning. Voices complaining about locals being priced out and there being a shortage of homes for key workers in tourist communities have caught the attention of politicians, so next year will almost certainly see higher council taxes and possibly further rises in stamp duty or other measures to make holiday home ownership more expensive.
Remember we’re here to help
You can see there’s a lot happening in 2022 and we’re here to help on Move iQ. Whether it’s setting out your rights as a tenant, tips on how best to present your home to sell, where you can find the best mortgage, or the sort of premium you’ll pay for a gorgeous view. It’s likely that expert advice will be the order of the day next year – so check back with us.
Last Updated: December 9th, 2021
