One of the most frequently asked questions we receive from investors is ‘What are our housing market prediction in 2022’. We have written extensively about our 2022 predictions for the market in other articles recently, so this article looks at what other commentators are saying and reviews their predictions for 2022 …
Grainne Gilmore, head of research at Zoopla, one of the UK’s largest property listing websites is predicting the following trends for 2022.
The pandemic ‘search for space’ continues
Zoopla forecast that the search for space would continue into 2022 and last week reported record-high demand for family homes in January. They expect this trend to continue through Q1 and the remainder of 2022.
The market will ‘normalise’ throughout the rest of 2022
Zoopla reports that they have already seen the market for apartments normalising, with a returning appetite from international buyers, employees, and students for city-center apartments.
Supply will start to build in 2022
The total stock of properties available to buy is currently 45% lower than the five-year average. However, Zoopla report that new supply coming to the market is tracking ahead of levels seen at the same time in 2020 and 2021. The number of valuation leads is also above the levels seen in 2021.
Economic headwinds will rise in 2022
Rising inflation will lead to more interest rate rises which will filter through to the cost of mortgages. 75% of existing homeowners are on fixed rates so won’t feel the immediate impact of rate rises. New homes loans will get more expensive but they are coming off a low base.
Transactions will return to levels seen before the pandemic
Zoopla reports that as the market normalises price growth will slow. House price rises will be underpinned by the continued supply and demand imbalance, although this will be less extreme than the conditions seen in the last year.
The economic headwinds will curb house price growth with market growth expected to be 3% by the end of 2022. The number of sales is forecast to be 1.2 million from a high of 1.5 million in 2021.
Rightmove, the UK’s largest portal has the following predictions for house prices in 2022:
House prices will rise in 2022
Rightmove predicts that the national average asking price of a home in the UK (currently £342,401) will rise by 5% in 2022 – an increase of £17,000.
This is driven by the supply and demand imbalance putting upward pressure on house prices.
Supply is predicted to increase
In December 2021 Rightmove reported a 19% increase in the number of people requesting a valuation of their home via Rightmove compared to the same time in 2020. With more homes available on the market, the pace of house price growth with slow.
Less frenzied market than 2021
Rightmove’s Tim Bannister predicts that the 2022 property market will continue to be busy, but it will be less frenzied than 2021, as more owners come to the market in the first half of 2022.
Tim predicts “Movers will benefit from good mortgage availability, as well as more choice of property – especially with the usual surge of sellers coming to the market in the spring. Price rises will be slower this year, compared to 2021, which will encourage some homeowners who have held back on moving to take action”
Regions likely to see the biggest price growth?
According to Rightmove, the four most sought-after regions for buyers are Scotland, the West Midlands, the South West, Yorkshire and the Humber. Rightmove predicts these areas will see 7% price growth in 2022.
London prices will continue to rise
Rightmove forecast price growth of 3% in London in 2022 as prices didn’t rise as much as the rest of the country and demand wasn’t as strong. Rightmove’s Tim Bannister predicts “There will be hotspots and cooler spots across the capital, as there are so many different pockets operating at different speeds. International buyers have been more on the scene and buyers across all budgets are finding some attractively priced properties”
You can read our predictions for 2022 in our articles:
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