What does 2022 hold in store for the housing market?
Key factors driving the housing market in 2021 were a continuing desire for homes with more indoor and outdoor space, a mismatch in supply and demand, and the temporary cut in Stamp Duty.
The resulting property boom, which according to Zoopla has made it the busiest year for the housing market since 2007, also saw UK house prices rise to record highs, with the average UK property hitting a record high of almost £273,000.1
A strong end to 2021
According to the latest figures from Halifax, house prices rose by 1% in November alone, taking the annual growth figure to 8.2%. Significant regional variations continue to be seen; in England, the North West was, by far, the strongest performing region with annual growth of 11.4% and an average house price of £209,287; London has remained the weakest performing area of the UK, although with an average property price of £521,129, values in the capital remain well ahead of other parts of the country. House prices also continued to rise in Scotland, with the average property costing £191,140 and growth of 8.5% year-on-year.
Uncertainty for 2022
One agent2 has predicted that house prices will increase by 7% in 2022 in a ’best case’ scenario, with a downside prediction of 2% growth. However, it remains to be seen how any increases in Bank Rate or other economic factors will affect the market. Halifax Managing Director Russell Galley commented, “Looking ahead, there is now greater uncertainty than has been the case for quite some time, with interest rates expected to rise to guard against further increases in inflation. Economic confidence may also be dented by the emergence of the new Omicron virus variant, though it remains far too early to speculate on any long-term impact, given insufficient data at this stage, not to mention the resilience the housing market has already shown in challenging circumstances.”
1Halifax, 2021
2Strutt & Parker, 2021
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.