HOUSING MARKET PREDICTIONS FOR 2022
Predictions, on the one hand, sometimes come true, and on the other, they don’t. The property market forecast for 2021 was rather pessimistic, but look what happened! There was a boom, and it’s still going strong. Looking ahead to 2022 and the various factors that could affect the housing market, the forecast is for it to remain stable, if not slightly higher than in 2021. This is something that estate agents Hereford are looking forward to. Property sales in all regions are expected to do well as a result of the region’s economic growth.
We examine some of the factors that may have a positive or negative impact on the housing market.
The pandemic shifted people’s priorities in terms of where they should stay. With people being confined to their homes and working online as a result of the lockdowns, more spacious housing became a trend, with additional rooms for office space and an outdoor area becoming a necessity, whether for a garden or a place to relax. As a result, many people have relocated from congested city areas to the suburbs and rural areas. People are now more wary of confined spaces such as apartment buildings, particularly since the outbreak of the highly contagious Covid-19 virus. As a result, the demand for more spacious independent housing began to grow.
Despite the fact that the lockdowns are over and some people have returned to their offices, the healthier environment of separate and larger housing remains popular. As a result, the housing market is more optimistic.
When supply is insufficient to meet demand, both the requirement and the price rise. This is comparable to the real estate market. Demand far outnumbers supply, resulting in a stampede for property and, as a result, a rise in prices.
Unexpected savings: Affordability Because of the lockdowns, which forced the closure of so many facilities, spending on non-essential items like random shopping, entertainment, eating out, and vacations was limited. This resulted in some unexpected savings, which came in handy for some people who were looking to buy their first home.
Price-to-earnings and repayment-to-earnings ratios: The furlough programme guaranteed a significant portion of the employee’s income. As a result, while taking into account the repayment/income ratio, affordability was achieved.
Prospective buyers have benefited from the 95 percent loan-to-value mortgage scheme, which has been implemented by the government. Other low-interest mortgage offers have emerged, making it easier for people to take advantage of them and pay the required deposit.
Return on Investment: Professional investors will look for opportunities in “emerging locations,” where demand is expected to increase over time. At the same time, they will look for properties in those areas that are reasonably priced. As a result, their return to yield will be guaranteed.
Foreign investment: The vaccination campaign was a success, and some international travel restrictions have been lifted as a result. Foreign investors have always been drawn to the UK housing market, and this trend is expected to continue through the rest of this year and into 2022.
House price inflation has been spreading across the United Kingdom, with the exception of London, which has remained relatively stable. The impact of the SDLT holiday was not as noticeable in London as it was in the rest of the country due to higher price levels. However, with a return to normalcy in sight, the London housing market appears to be on the mend. This will be beneficial to the real estate market.
SDLT holiday: With the Stamp Duty Land Tax holiday being phased out and ending on October 1, 2021, there is likely to be a drop in property purchases.
Lower incomes: As the furlough scheme expired at the end of September 2021, monthly incomes are likely to fall. Furthermore, until the economy stabilises, unemployment is likely to rise. This will have an impact on property purchases.
Low-interest mortgages: While this in and of itself is enticing to buyers, keep in mind that the lower the mortgage interest, the higher the property price. As a result, low mortgage schemes may result in exorbitant property prices, deterring potential buyers.
Given the above positives and negatives affecting the UK housing market, it is impossible to make a definitive prediction. However, it appears that the real estate industry will continue to thrive. The “bricks and mortar” investment has proven to be resilient in the face of all storms thus far, and it appears that this trend will continue. However, only time will tell, and we eagerly await what the housing market will bring in 2022.