UK Property Market Update October 2021
The UK property market is expected to record the strongest level of sales and price growth since 2007, with an impressive £473 billion worth of new sales agreed, which is £95 billion higher than last year.
The demand for property has been driven by a multitude of factors, including:
- Buyers reassessing their living conditions and surrounds, relocating to larger homes, different areas and with access to green space
- Stamp Duty Holiday presenting significant savings for property buyers, who brought forward their decision to buy
- Record low mortgage interest rates
- 95% mortgages available for first time buyers
- Investors realising the price growth forecasts
Property Price Inflation in 2022
Many spectators predicted the high levels of demand to suddenly end after the stamp duty holiday, however, demand continues to be 25-30% above the 5-year averages since the end of the holiday, which indicates that the stamp duty holiday was not the sole reason for high levels of demand.
This inflated level of demand is expected to extend into 2022 as the impact on buyer behaviour post pandemic as buyers are expected to continue to evaluate their housing needs, where they live, work and how they work, which will continue support market activity and the high volume of property sales. Many property owners have found that they now have increased levels of equity, prompting them to move up the property ladder.
The property portal, Zoopla, recently undertook a national survey with the results showing that 22% of UK households remain “eager” or “very eager” to move in the next 18-months as they reassess their living situation as a result of the COVID pandemic.
Reasons for moving include:
- Current home not suitable for their requirements = 46%
- Moving nearer to friends and family = 28%
- Changes in work, e.g. hybrid working from home = 18%
There has also been a large number of households who have sold their property, but could not find a suitable onward purchase; therefore, are currently in rented accommodation, called “Stop Gap Renters”. This pent up demand as 6-12 month tenancies come to an end will have a positive impact on property price inflation in 2022.
The property stock levels have been limited throughout the pandemic, which combined with the fact that not enough new homes are being built to keep up with demand, has forced property prices up across the UK.
Regional Increases in Property Asking Prices
Thee North West of England and Wales saw the highest level of price increases at 2.3%, with asking prices reaching £232,639 and £237,830.
The South West and London both experienced increases of 1.9%, with prices reaching £359,906 and £650,683.
The average property asking price in the UK increased by 1.8%, the highest increase for this time of year since October 2015. The average property asking price is now an average of £344,445, an increase of 6.5% from October 2020.
Strongest Regional Price Growth for 2022
Property price growth of 3.5% in 2022 for the UK is forecast by industry experts, still high but more modest than the 6.6% average growth seen in 2021.
London experienced the lowest rate of price inflation at 2.3% and is the only region where price growth is below the 5-year average with demand impacted the most by the COVID pandemic. Below average growth of 2% is expected in 2022 in London where affordability will restrict growth in the short-term.
Regions with higher levels of affordability, such as the North West of England are expected to see the highest levels of price growth at 4.5% in 2022, which have also seen the most significant gains in 2021.
Is Now a Good Time to Buy UK Property?
As demand from home buyers is set to continue into 2022, supply of new property onto the market being restricted, investors buying res-sale property in the secondary housing market are facing stiff competition as home buyers are more likely to pay more than the true value of the property.
Buying property that is off-plan, or, under construction is a great way to secure below market value property and benefit from the high levels of capital appreciation whilst it is being built.
Explore our range of opportunities in the North West of England, which is expected to see the highest levels of price growth in 2022:
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