If Omicron hadn’t been present, we would’ve predicted another rise in the UK property market this year. Sellers were stimulated last year by the stamp duty holiday and since the tapering off of this scheme, no new incentive has been offered. For us all, life moves on and so, it seems, does the market. The lack of new stock coming to market and the ever-increasing number of ready buyers has in fact consolidated the high prices last year’s booming market created. The rise now might not be as steep as it could’ve been but it’s reasonable to predict a further increase in property values despite the typically increased supply of properties that tend to become available at this time of year.
This could be seen by the fact sellers were becoming more active before Christmas. UK sales instructions climbed by 7% in November and December compared to the average in 2015 and 2019. Property valuations (a leading indicator of supply) was 10% higher. It was predicted that high levels of demand would be better matched by supply in early 2022, helping to slow down or curtail the large price growth trend we experienced in 2021.
The omicron variant has made little impact on the market, so it does look entirely possible that the market will still follow this trend. However, a lockdown could shake up these plans as buyers and sellers will struggle to make a plan. In situations like these, it can be beneficial to seek some advice and thankfully our team is well equipped to help buyers and sellers alike.
In the event of a lockdown those who are suitably prepared will be reaping the benefits, and last year many agents allowed physical property visits only to those who were deemed credible, and in a position to progress. Getting your property listed for sale and a deal tied up puts you in a proceed able position when it comes to making your next move. But whenever you decide to sell demand will likely be strong. The downside to all of this is, of course, when you come to sell, you may not have a property lined up. January is our first indication as to market trends for the year ahead, and the number of prospective buyers in November & December of 2021 was 63% higher than the average between 2015 and 2019.
A factor that could limit demand in 2022 is the cost and availability of borrowing. Throughout the Covid period, the supply of mortgages became a real issue, especially to those self-employed or with a low deposit. With interest rates beginning to stabilise, lenders returning to the 5% and 10% deposit market, buoyancy in the job market and an ever-increasing acceptance of those self-employed people being a good credit risk (despite any covid support they received), it seems the indicators all point to a renewed and continued supply of good mortgage deals.
Though rates are rising, it’s likely they will increase slowly. The impact, at least in the short term, will do little to deter the appetite of home movers. December saw the widely reported increase in the Bank of England base rate from 0.1 to 0.25, a negligible change but indicative of the increased consumer confidence and economic resilience we have seen post-Covid.
One difference between now and early 2020 is inflation, which is predicted to reach around 7% this year. This will lead to an increase in the cost of living, which should in turn stunt house prices and demand. The numbers quoted will almost certainly not be matched by employers and counterbalances any want for the Bank of England to raise rates quickly.
To conclude if we don’t steer too far away from current projections, the UK property market should have another strong year so if you are looking to sell, talk to our agents today and start getting a plan ready for your move.
