We’ve had an 18 months like no other in respect of the pandemic and frenzied housing market. As these have been unusual times, is there any way to predict how things will go into 2022? Despite the unusual circumstances it is still possible to see certain patterns and trends that lead us to predict what we can expect for the coming year. The big players such as Rightmove are suggesting we will see you closer to normal but still busy market which is encouraging.
With overinflated house prices, the market into 2022 would likely suit the more hesitant movers who took the decision not to market their property in such frenetic conditions. The counterpoint to this is the continued race for space and demand for rural properties in the £200,000-£750,000 bracket in the countryside. Changes in the way people work and live continue to put pressures on housing stock. There are still signs that city apartments are in demand which suggests the market is opening up for first time buyers without families.
Rightmove is predicting a more traditional market by forecasting a return to more seasonal falls in the price of property. The consensus is still that prices will rise by around 5% in the coming year but sellers will not be able to market at the price they were during 2021 due to constraints on buyer affordability. This has been driven in part by the Bank of England interest rate rise and its impact on mortgage lending.
The Bank of England raised interest rates in December for the first time since the beginning of the COVID-19 pandemic from 0.1% to 0.25%. This decision was based on data from the office of national statistics showed UK inflation hit a 10 year higher 5.1% in November. The price of petrol was a massive factor in this and it’s argued that there may be further interest rates rising in 2022 to quell inflation. Add in the end of government support measures and stretched household budgets, it’s fair to say house price growth is likely to slow. The data does not however suggest that there will be any drop, just a more usual sustained growth.
We usually see a shift right around the time the turkey leftovers are done and the decorations are down, and this year is suggesting this traditional pattern. Those sellers who were perhaps hesitant to enter the frenzied market of 2021 are definitely contemplating the market at the start of 2022. We would likely see sellers on the market with more considered finances who are more interested in a realistic successful asking price. The same sellers will likely have funded mortgages in place as the desire for those buyers who are ready to move stays for 2022. No one knows the Croxley Green, Rickmansworth & Watford area better than us so if you’re ready to sell come and have a conversation with us.