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The 2022 Market: What to Watch for, and When

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The Nationwide’s latest index, issued a few hours before the start of 2022, reported house price increases averaging 10.4 per cent in the previous 12 months – the largest annual rise since 2008 and just the most recent of many indices showing the market in overdrive. 

So is it a case of New Year, Same Old Story?

Perhaps, but whether you’re a seller or a buyer, or just an outsider wanting a fix of property news, it’s worth looking behind the headlines and examining the finer details. 

I’m not being a house boom party pooper here but in reality the market hasn’t been uniform everywhere, nor for every type of home. 

Regional and property variations

Firstly, some parts of the country are hotter than others. And while everywhere has been ‘good’ for sellers in particular, some places have been ‘very good’ and others just ‘OK’.

For example there was the much-hyped ‘race for space’ with city slickers heading to rural areas for bigger homes – that’s why prices in south west England rose 11.5 per cent in 2021, while London prices were up a modest 4.2 per cent according to the Nationwide.

Secondly, the scaled-down version of the race for space means larger homes were more in demand than smaller ones in 2021. 

Zoopla says that in many areas, the price rises for houses were up to four times the increases for apartments. More anecdotally, my conversations with estate agents suggest that homes with gardens sold quickly – sometimes without even being fully marketed. Flats and maisonettes, by contrast, took their time, especially if there was no outside space.

So while there’s no denying 2022 is starting with sellers still in the driving seat – because there are relatively few properties on sale compared with buyers – the market is much more nuanced than the high level house price indices might suggest.

A few bumps in the road

In addition, it’s worth noting what may influence the mood music surrounding buying and selling in 2022 – and perhaps informing your timing if you want to enter the fray yourselves.

Interest rates may rise further, albeit from a very low base. I’ve already written about how relatively few buyers need mortgages, and how the Bank of England has pledged to raise interest rates gradually and by small amounts. So this is not a reason to change property plans.

Nonetheless, it’s worth noting that the Bank of England’s monetary policy committee – the group that decides on interest rate rises – does not meet during April, July or October so there will be no unhelpful headlines then about the increased cost of mortgages. Might these be the optimum times to put a home on the market?

Another factor likely to hit the economy this year will be rising fuel costs. The fuel price cap (a government limit on how far electricity and gas charges can go up) will be increased this coming spring but the real effect won’t be felt until next autumn and winter.

In case this depresses confidence in the economy, and thus reduces people’s enthusiasm for moving house, it might be better to sell before next winter.

And then of course there’s Covid-19. My theory is that, for good or bad, we’re all learning to live with this to some degree and it’s certainly not depressed the housing market in the past two years, has it? The pandemic will still make headlines but let that not change your plans for how and where you and your family want to live. In fact, quite the reverse.

Still a sellers’ market

Despite a few potential hiccups, 2022 looks set to be another strong year for the housing market with demand outstripping supply, for some months to come. 

Last year there were 1.55m house moves according to Rightmove, one of the highest figures in the past 20 years. Expect fewer this year as there is unlikely to be a big incentive like the now-ended stamp duty holiday – but many individuals still want that ideal home.

If you do take the plunge, see the large number of Move iQ guides helping your sale and purchase happen as smoothly as possible. Good luck – and let me know how you get on.

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Last Updated: January 5th, 2022

Phil Spencer

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