As we predicted, the market has shown no signs of waning at the start of 2022. We forecast that supply and demand would stay strong and that house prices would continue to rise. Let’s look at some of the drivers for this robust start to the year.
Pandemic to endemic
There is no question that the influence of COVID-19 is starting to wane in terms of the mindset of the market as buyers seem undeterred by any concerns around the omicron variant. With a strong vaccination program and many taking up the boosters plus the return to workspaces for many, the feeling that the pandemic is becoming endemic certainly gives confidence to the housing market. The news that economies are stabilising, business is moving forward, and global movement has become possible once again has had a positive effect on the housing market.
11.2% growth in house prices
With Nationwide reporting that house prices grew annually by 11.2% this month, means the strongest start to the year for 17 years. Considering seasonal effects, this is six months in a row we’ve seen an increase. With forecasts predicting a 10.9% rise the average house price now stands at £255,556 which is up from £254,822 in December. The flip side of this growth is that the market continues to prove challenging for first time buyers.
Demand remains robust
The ‘race for space’ is showing no sign of waning which is transforming the market and in part fuelling the price growth causing challenges for many first-time buyers. The temporary patterns of home working have developed into a more permanent hybrid of time in workplace balanced with working from home. This has continued to drive demand for homes in areas with outside space or scope for home offices as buyers adjust into new ways of living and working.
With data released from the Bank of England, mortgage approvals in December rose to 71,000 which is above the 12-month average from February 2020 of 66,700. Experts are warning however that tight lending criteria will restrict those looking to buy or remortgage. Deposits are now at a record high which is a cause for concern for first time buyers. In addition to this a typical mortgage payment as a share of take-home pay is also above average. Affordability is always a key factor in the market so we’re likely to see a dampening on housing market activity and a slowing in house price growth.
Competitively priced housing on the commuter belt
One area on the commuter belt for London that still boasts affordability is Rickmansworth. A town that has country appeal and is situated just 5 miles from Watford and 20 miles from Central London, Rickmansworth has seen growth yet still has many properties that are in affordable reach for buyers. For those looking for a taste of village life Croxley Green is set in rural Hertfordshire between Rickmansworth to the southwest and Watford to the north with many competitively priced properties available in this sought-after area.