If you are wondering what will happen to house prices in 2022, you aren’t alone! It’s one of the most common questions we are asked at Caledonia Bureau as people want to make sure they are investing in a property that will rise in value, not fall.
The good news is that if you are considering moving, we are seeing more properties coming to the market after a year of limited supply. It has been a highly competitive 18 months, so it’s great that we are starting to see more signs of properties being listed for sale.
According to Rightmove, the national asking price of a home will rise by 5% next year. On the average UK value standing at £342,401 this equates to around £17,000. Scotland is one of the most sought after regions across the UK and it is expected that house prices will rise by around 7%, with the lowest gains predicted to be in London at only 3%.
Zoopla has estimated that there will be a total of around 1.5 million sales in 2021 and the total value of homes being sold will be in excess of £473bn, which is £95bn higher than last year.
Although the availability of homes is improving, it is still not meeting demand which will continue to put upward pressure on house prices. Next year, however, could bring fresh opportunities for those looking to move home. This month on Rightmove, estate agents reported a 19% increase in enquries from those looking to get a valuation of their property compared to the same period in 2020.
Zoopla Research recently carried out a national survey of households in the UK. This revealed that 22% of home owners were ‘eager’ or ‘very eager’ to move home in the next 18 months as a direct result of the pandemic.
Another factor which could affect the rise in those wishing to move, is homeowners’ increased housing equity in their property. The average value of a home has risen by nearly £50,000 over the last five years and so one in seven local authorities across the UK, two thirds of homes have risen by more than the average, giving households more scope to sell up and move.
An increasing number of homeowners are preparing for a 2022 move so there will inevitably be more properties for buyers to choose from at the start of the year, which could slow down the rate of house price growth. One of the key drivers for this is the ongoing re-evaluation of housing needs, and a move to more hybrid working especially with the latest advice to work from home where possible.
Although the housing market will be busy, it won’t be as frenzied as it has been since summer 2020 when the market re-opened.
In addition to a higher choice of properties, the outlook for the availability of mortgage deals is good. Although lenders have put up their rates in recent months in anticipation of a rate rise that didn’t happen, borrowing is still cheap, and rates are low.