The housing market in the UK boomed during the Coronavirus pandemic, bringing delight to sellers and dread for buyers as the prices reached an all-time average high last year. So what do the cards look like for 2022? Let’s take a look
Things are finally starting to look up for those looking to get on the housing ladder or move home as, according to predictions, 2022 is going to bring stability to house prices after they reached a record high last year which hasn’t happened since before the 2008 financial crash.
The office for National Statistics found that the average UK house price skyrocketed by 10.2% to a staggering £285,000 between 2021 and 2022. Despite this, 1.5 million homes were purchased last year after the government launched financial schemes such as the Stamp Duty Holiday. Prime Minister Boris Johnson’s orders to work from home also prompted many Brits to relocate quickly in order to have a suitable place to stay and work during the multiple lockdowns.
Now that the Stamp Duty Holiday scheme has ended and since the Bank of England raised interest rates, experts believe that the housing market will cool off in 2022. Bryan Marshall, co-founder and CEO of Gazeal, said: “We don’t expect to see the same in 2022 as interest rates will rise and the supply of homes coming to the market will increase.
Buyer demand we expect will remain strong, however, with an expected rise in interest rates, we may see caution as potential house-hunters may opt to save for larger deposits and delay their search for a home, expecting price cooling”
However, some experts predict that despite the Stamp Duty holiday ending and the increasing interest rates, many will continue to be driven by the ‘race for space’ which was prompted by the pandemic, leading many buyers to prioritise properties with larger gardens and more room for working from home.
Scott Clay from the specialist lender Together said:
“Looking beyond the impact of the Stamp Duty holiday and the pent-up demand following the reopening of the housing market last year, it’s highly likely the market will largely revert to type.
Typically, the busiest time for property transactions is in the Spring and in the Autumn, with peak summer months and Christmas being times for relatively subdued activity. The ‘race for space’ phenomenon meant existing homeowners progressed quickly up the ladder but the same can’t be said for first-time buyers.
Most were met with limited supply, extortionate prices and lengthy queues for virtual viewings.What’s more, with the end of the popular Help to Buy scheme scheduled for 2023, there will soon be a significant gap in the market for first-time buyers needing support with deposits.
On the plus side, there are still many schemes to help this group. Shared Ownership is an equally popular scheme and we continue to see strong demand from first-time buyers seeking these types of properties as they can be a great stepping stone onto the housing ladder for young families and those on lower incomes.”
At Ryans, we offer a wide range of personal services including financial management and tax planning to help you manage your finances with expert advice on saving for a deposit and a mortgage. If you have any questions or want to find out more about our services, please don’t hesitate to get in touch with one of our friendly team members who will be more than happy to have a chat. For the latest updates and advice, take a look at our helpful blog.