What to expect from the property market in 2022

What to expect from the property market in 2022

Rightmove described the UK property market in 2021 as ‘frenzied’ – and it’s hard to disagree.

Despite the continued challenges of the Covid-19 pandemic, the UK market has excelled over the past 12 months.

But what’s in store for 2022?

Here, we’ll examine the 2021 property market and provide all the predictions on what will happen to UK house prices as we move into 2022…

 

Will house prices drop in 2021?

House price growth in 2021 has exceeded the expectations of many – including PriceWaterhouseCoopers’ (PwC) prediction of 1% growth and the Office for Budget Responsibility’s ‘upside’ prediction of 4%.

According to Nationwide’s November House Price Index, annual house price growth reached 10%, with prices up 0.9% on October.

That takes the average price of a UK property to £252,687.

Rightmove’s data for November was slightly more conservative, with the property portal suggesting annual price growth of 6.3% – still ahead of those December 2020 predictions.

 

UK region

2021 price growth

Avg property price

North East

1.9%

£164,563

Yorks & Humber

4.7%

£219,222

East Midlands

6.5%

£261,311

North West

7.4%

£231,480

West Midlands

6.7%

£259,940

Wales

8%

£232,166

 

Data from Rightmove’s November 2021 House Price Index

 

Property market predictions for 2022

Most predictions for the 2022 UK housing market suggest a quieter year than the 12 months of 2021.

 

Rightmove’s 2022 property market predictions

Property portal Rightmove is predicting 5% house price growth in 2022, with the ‘edge’ taken off seller pricing power due to stretched buyer affordability.

The portal is also predicting more buyer choice early in 2022, with a jump in sellers requesting valuations from agents throughout November.

 

Zoopla’s 2022 property market predictions

Strong demand and increased owner equity have led property portal Zoopla to predict price rises of 3% in 2022.

The portal suggests there will be a decrease in activity compared with 2021, with an estimated 1.5million sales set to complete before December 31.

 

Office for Budget Responsibility predictions

The OBR predicts property prices will end 2021 8.6% higher than in December 2020 and could rise by a further 13% over the next five years.

In 2022, the OBR predicts property price growth of 3.2%, followed by 0.9% in 2023, 1.9% in 2024, 2.9% in 2025 and 3.5% in 2026.

 

Key takeaways for first-time buyers

  • Predicted further rises in property prices and high buyer demand could put more pressure on first-time buyers
  • First timers should ensure they have a mortgage agreement in principle in place when searching for a property to buy

 

Key takeaways for buyers

  • Buyer demand looks set to remain high early in 2022
  • Rightmove predicts an increase in properties coming to market, meaning more choice for buyers and less competition

 

Key takeaways for sellers

  • The number of properties currently on the market is low, with Rightmove reporting seven out of 10 homes on the portal are ‘sale agreed’
  • Sellers should be realistic with asking prices, with buyer affordability likely to be more stretched in 2022

 

Further reading…