What will 2022 bring for the housing market? With the end of 2021 we take a look back at an incredible 12 months in the property market and try to get a grip on what 2022 may hold for those of us interested in property.
The last year has been an incredible journey for most on a personal level and the property market has not escaped the ups and down’s of Covid, Furlough, the Stamp Duty holiday, and the pressures of trying to navigate the financial markets in a global pandemic.
The year ended on a high for the UK housing market, very high as it happens, with record breaking price increases and a new record average property price of £254,822 up nearly £24,000 over the year*.
According to The Nationwide, house price growth peaked in December at 10.4% making 2021 the strongest calendar year for house price growth since 2006 and as already stated throughout the year, the lack of supply of new property coming to market and the insatiable demand from buyers looking to secure a new property in the midst of a life changing pandemic has combined to produce one of the strongest housing markets in history, but what does this mean for 2022?
Well before we dust off our crystal ball, we need to take a quick look at the local market and how Derbyshire has fared overall.
In line with much of the rest of the country, property prices have increased in the East Midlands, with figures from Rightmove suggesting a high of around 8-9% over the year. We have certainly seen the increase in demand for homes in Derbyshire, with our teams booking record numbers of viewings month on month, some 28’319 in total, equating to well over 2000 a month. With over 10’000 new buyers registered on our database and over 215,000 visits to our website, demand in the Derby area over 2021 has been nothing short of record breaking. Supply of new property coming to the market has been slightly lower than the average, but with over £353 million worth of property sold and an average of 101% of asking prices achieved, the huge surge in buyer demand in 2021 compared to the already busy market in 2020 would seem to be what has accounted for the upward pressure on property prices in the Derby area.
So, what can we expect to see in 2022?
Well, early indications are that the continued demand for homes and the shortage in supply is still in full force and Rightmove claims its visits over the Christmas period were its busiest ever with what it calls ‘buyer demand’ up 23 per cent compared to the same time a year earlier*.
Indeed, the most up to date figures from the Bank Of England show that house purchase mortgage approvals in November, the most recent Bank of England data available, ran at 66,964 – roughly the same as a month earlier.
Most reports are hedging their bets, with a predicted continuation of house price growth, but at a considerably slower pace, the most common figure being suggested is around a 5% rise over the year.
With the pressure of the new Omicron variant, Bank Of England Base Rate increases, energy supply costs increasing and further rises in inflation expected, could the increase in the cost of living and the cost of borrowing temper some of the record demand seen in 2022?
It’s a definite possibility…
As always, we will have our fingers on the pulse of the local market, so if you need any advice, guidance or would like to find out more about buying, selling or renting in 2022, just click here.
