To predict where we are expected to go in 2022 with the UK housing market, we need to know where we have been!
So let’s break down what happened to house prices in 2021.
The biggest impact on the housing market in 2021 was the extension of the stamp duty holiday. Originally due to end in March 2021, Chancellor Rishi Sunak said it would continue until the end of June, before tapering off and standard rates returning at the end of September.
As a result of this, during the months leading to the end of September saw the market flooded with new buyers looking to secure a new home before the tax break ends.
Interest rates had also been kept low as the Bank of England tried to support borrowers during the COVID-19 pandemic. While rates are now starting to climb again, they are still well below pre-pandemic levels.
Here at Pymm & Co Estate Agents in Norwich, we are currently seeing a continued increased demand for houses, but we are not seeing an influx of new properties coming onto the market.
When there is more demand than supply, we see prices rise. That is exactly what happened to the UK housing market in 2021.
The UK housing market in 2022 will be influenced by both positive and negative factors.
On the positive side – The pandemic induced search for space has further to run.
The ability to work from home has expanded the horizons for many office workers who now feel able to look further afield.
But on the downside – the rising cost of living, combined with an expectation that mortgage rates and taxes will rise during 2022, will impact affordability.
House price growth is expected to end 2022 at 3%, with growth likely to be strongest in the East Midlands and North West and weakest in London.
Transaction levels are expected to fall by 20% to 1.2 million, in line with the long-running average but still comparatively high compared with the past decade.
After a year of robust market challenges, the demand for property is set to grow further, particularly in those areas where more space, a garden and parking can be secured for less cost.
As always, there are undoubtedly a few unknowns to come, but the housing market in 2022 will remain buoyant through beyond.
If you are thinking of moving this year, either downsizing or upscaling, why not arrange a FREE no obligation Valuation with us to get an idea of where you stand in the market place. Click Here. Or if you’ve sold already and want to view our portfolio just click here.