According to Nationwide data, property prices in the UK were 10.4 percent higher in December 2021 than in December 2020. According to the House Price Index from the building society, 2021 was the best year for house price growth since 2006. The average property price reached £254,822, up £24,000 from the previous year. Is today a good time to buy a house in the UK, given the sky-high prices? Should you hold off until the housing market cools and prices fall? Will they come crashing down, and if so, when? We’ll help you examine the current property market and weigh the benefits and drawbacks of purchasing in the near future in this article.
Current housing market
House sales and prices in the United Kingdom reached new highs in 2021, fueled by increased buyer demand following the end of the first COVID-induced lockout in May and the stamp duty land tax holiday, which ran from July 8 to September 30, 2021. Estate agents in Knightsbridge opine that many people began spending more time at home for work and recreation, prompting them to reconsider their lifestyles and housing requirements. As a result, a record number of homeowners decided to sell and relocate. Larger houses outside of cities with fast wi-fi, gardens, and access to public open spaces — the so-called “Race for Space” — were in high demand.
Despite projections that the market would slow, sales remained strong all year. Although asking prices fell in December, this was typical with past years, and the market concluded on a strong note, with prices 10.4 percent higher than December 2020. Rightmove stated that more houses were designated as sold subject to conditions than ever before, with seven out of ten properties marked as such, up from two out of ten in 2012. The average house price, on the other hand, has not increased at the same rate across the country. Wales leads the way with a 15.8% price increase to £196,759, compared to London’s 4.2 percent increase to £507,230. Property prices rose the most in the South East, South West, East of England, and North West.
There have also been shifts in demand for various forms of real estate. Larger family homes sold faster and for more money in the
first half of the year than smaller properties, with flats being the most difficult to sell. However, once individuals returned to work and resumed their “regular” lives in December, there was an increase in demand for apartments and a decrease in searches for houses. If you are looking for properties for sale in Knightsbridge you can make the process easier by contacting a local estate agent to help you out. The year 2022 has started with a booming property market.
Will there be a drop in house prices in 2022?
It’s nearly impossible to predict how the UK housing market will alter in 2022, given the uncertainty of COVID-19 and new versions like Omicron. Not to mention Brexit, which continues to have unanticipated consequences for the economy. However, when the number of buyers and sellers begins to level out, property specialists expect the market to remain busy but “less frenzied” than it was in 2020-2021. The market will remain strong, but housing price growth will moderate and may revert to levels seen prior to the pandemic.
Demand from buyers: The Bank of England raised interest rates for the first time in over three years in December. This is anticipated to reduce buyer demand, which will assist to keep prices stable. Furthermore, the stamp duty break, which aided in the skyrocketing of home prices last year, expired in September, so it will not be a motivator for purchasers in 2022. There are initiatives to loosen mortgage lending laws in order to keep the market moving in the wake of Omicron’s uncertainties, but buyer demand appears to be calming down in the coming year.
Property Prices: The rate at which house prices have been rising will almost certainly slow as the above factors come into play. This has increased the pressure on the budget in households in the first quarter of the year due to inflation. The rising household energy costs and uncertainty caused by the coronavirus pandemic has added to the costs. However, there are no clear signals that prices may fall in the near future. In reality, most house price indexes expect a minor increase of up to 5% in the coming year.
The future for the UK housing market in 2022 remains uncertain, owing mostly to the pandemic and its influence on the economy and household finances.
Is Getting a Mortgage Approval in 2022 Easy?
Unless you have the cash to buy a new home outright, your ability to obtain the mortgage you require will determine whether or not now is a suitable time to buy. Last year, buyers had a plethora of mortgage options. According to data given by Which?, the number of mortgages available increased by 42% between October 2020 and February 2021. There was also good news for first-time buyers, as some lenders reintroduced 90% mortgages, making it simpler to climb on the property ladder. The 40-year mortgage made a comeback, and lending standards were loosening across the board, with some lenders moving toward a more lenient loan-to-income multiple.
Yes, the times are changing and this really is a good time to purchase property in the UK. The statistics do show that many people are indeed struggling with their finances, but it doesn’t mean that you can’t take advantage of rising property prices through investing. If you can set your budget up accordingly, then you can get into a good property for a very reasonable price without getting caught up in buying anything less than what you want.