For the property industry, the past year has been memorable. The stamp duty holiday, low mortgage rates and people considering their living options as they spent more time at home resulted in a boom for the market. Many industries were left feeling the negative impact from the pandemic, but property hit record highs, with house prices rising at the fastest pace in 15 years over the past three months. As we move forward to a new year, the market’s ability to remain unexpectedly buoyant throughout the past year raises the question of ‘what will 2022 bring?’
The most recent Halifax House Price Index (November 2021) gives us an idea of what we could expect. It showed that prices rose by 3.6% in the months approaching the new year, making it the highest quarterly rise since 2006 and brining the average price of a home to a staggering £272,992.
Many components have played a part on why this has been such an impressive year, including the shortage of properties on the market, which saw the government announce plans to build 300,000 new homes a year in order to meet current demand. Alongside this is the rise of a recovering jobs market, fueled by the opening of hospitality and many of the UK workforce returning to the office.
The excitement of the past year has made many industry experts voice their predictions for what they think we will see in 2022. National estate agents, Jackson-Stops, is predicting that property values will increase by 2-3% in the new year. They also predict that chains will become shorter due to the volume of cash buyers in circulation and more purchasers will return to the sales market from rental. Rightmove has gone one step further, by suggesting that we will see an increase of 5% in house prices, with West Midlands, Scotland, Yorkshire and South-West being the areas to watch.
Private rental is thought to be on the rise too, drawing more investment into the sector. When the current ‘work from home’ restrictions are lifted, an influx of workers are expected to return to the central zones of cities, causing a predicted 4.5% rise in rentals.
If we have learnt one thing from the past few years, it is that we cannot predict what the next year will bring. But with all the signs pointing towards a great year for the housing market in 2022, it is very likely we will see even more positive movement within the industry for months to come.