Property Predictions For 2022
The property market went from strength to strength in 2021, despite the Covid-19 pandemic. Whilst there were concerns that Covid restrictions would cause property sales to stall, the newly-introduced Stamp Duty holiday encouraged thousands of people to consider moving home. Homebuyers could now save up to £15,000 when purchasing a home. Ultimately, 2021 became the busiest property market since 2007, with one in 16 homes changing hands by the end of the year, according to Zoopla. Read on to find out what estate agents in Chelmsford are predicting could be in store for the property market in 2022.
Price growth will slow down
House prices soared in 2021, with properties selling at lightning speed. The Stamp Duty holiday, together with people’s changing priorities meant that prices rocketed by as much as 10% in some areas. However, this year is likely to see a drop in growth to around 3-4%. So, whilst prices are still likely to rise, it’s unlikely to be at the rate seen in 2021. This will be good news for first-time buyers trying to get their first foot on the property ladder.
Fewer homes will be sold
There’s likely to be fewer homes coming onto the property market in 2022, which means we expect to see a significant drop in transactions. Many people bought homes before they would otherwise have done last year due to the Stamp Duty holiday, leading to transactions topping a staggering 200,000 in June. This is double the amount that we’d normally see at this time of year.
The good news is that this is likely to mean fewer delays in transactions, helping people to complete their moves more quickly this year.
Higher mortgage costs
With the Bank of England increasing the base rate from 0.25% to 0.5% this month due to soaring inflation, mortgage costs are likely to be higher for buyers. This is because a higher base rate means lenders are charged more, and so these increased costs are usually passed on to borrowers in the form of interest rate rises. The online mortgage broker Trussle calculated that this increase could add an extra £331.56 to the average mortgage annually. Borrowers who are on their lenders’ Standard Variable Rate will face a rate rise whilst also facing higher costs should they come to remortgage at a fixed rate.
90% and 95% mortgages will remain attractive
90% and 95% mortgage rates will continue to remain attractive in 2022. Rates for these mortgages have fallen over the past few months, dropping to the lowest levels since records began in 2011.
The introduction of the mortgage guarantee scheme along with the First Homes and Help to Buy initiatives helped to stimulate the increase in low-deposit mortgages last year, and it’s unlikely that lenders will turn away from those first-time buyers with small deposits going forward.
The UK property market is expected to perform well this year, despite the Covid-19 pandemic continuing to have an impact.
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