UK Property Market 2022
1. UK Property Market 2022: Here’s Where We’re At, And What Will Happen Next (suggested)
2. UK Real Estate 101: The 2022 Scenario
3. The Potential Performance of UK Property Market in 2022
Many investors are reviewing their present holdings as we look ahead to 2022 and wondering what the future may hold for UK real estate. In May 2020, The Bank of England predicted that the COVID-19 pandemic would cause a decline in real estate prices. They couldn’t have been more wrong.
Cut to 2022, the property market continues to prosper. The average property price increased to a record-high £276,759 in January 2022. According to experts, the housing market's rebound following the lockdown was caused by multiple factors, including pent-up demand, a shortage of available homes, people's desire for more space at home, low mortgage interest rates, and stamp duty holidays.
As we approach fall 2022, the world around us is changing. Read on to discover more about the UK real estate market projection for 2022 and potential changes.
Here’s what’s happening to the housing prices in 2022
House prices in the UK have risen by 5.6% in the first half of the year due to high levels of demand. By the end of the year, prices are projected to increase by a total of 9.0%. The phenomenal surge we've witnessed this year will likely be tempered by the continued expansion of transactions and prices, particularly if interest rates rise earlier than anticipated. Instead of a sharp price decline over the short term, this will result in a soft landing.
The market is likely to cool due to a variety of factors. The Russia-Ukraine war has made the cost-of-living crisis worse, fewer mortgages are being approved and the stamp tax holiday has expired. The Bank of England might raise interest rates, which causes an increase in mortgage costs, subsequently reducing demand for real estate. However, the Midlands and Northern England will likely see a considerable price increase in the coming months, primarily due to their greater capacity for expansion.
Regional variations in real estate prices
Property prices in the northeast of England increased by a record 13.3% in August 2021. In the same year, prices increased by more than £20,000 in the South East, South West, and East of England. London and Scotland witnessed the slowest growth. While prices in Scotland increased by 2.4%, they increased by 5.3% in London. In contrast, the rest of the UK had an increase of 7.1%.
If you plan to purchase a home in 2022, we would suggest doing some research on the local real estate investing trends to see how prices have changed recently and what the future holds. The North West and Midlands are touted to be England’s two fastest-growing regions. Prices are expected to rise by 28% and 24%, respectively, over the next four years.
Mortgage: Yay or nay?
The mortgage rates in the UK are still solid, although not as much as they were a few months ago. As usual, individuals who have the greatest down payments have access to the best mortgage offers. Before you zero in on a mortgage package, speaking with a mortgage counsellor might be a good idea since they often have access to deals that are not readily available.
It would be advisable to fix your mortgage rate while interest rates are still reasonably low right now. When interest rates started to rise in the past, those with variable-rate mortgages had the choice to switch to fixed-rate mortgages. However, this type of remortgaging is now much more difficult due to stricter affordability guidelines.
Rental price growth in 2022: an overview
The rental market has witnessed phenomenal growth in the recent past. In tandem with growing demands, rental rates are expected to rise by 9.5% by 2025. This comes after unusual price increases in several UK locations, including the East Midlands, which witnessed an 8% climb over the past year.
The UK property market prediction indicates that this rental growth is sustainable going forward since the UK economy is performing better than anticipated. With more and more offices opening up, people are looking to relocate. Many of these, especially young professionals, will be more than glad to rent as they attempt to restore their independence. Alternatively, people who are preferring a home office are also looking for properties which suit their increased needs better.
With the growth in rental prices, it is crucial to note that there are places across the nation where the monthly mortgage comes out less than the monthly rent. However, we anticipate an increase in rental prices in 2022 as a result of rising home prices and supply shortages.
Final Thoughts
Owning real estate in the UK has always been a popular strategy to safeguard assets, more since the pandemic. With limited supply and strong demand, UK real estate is virtually a "safe haven", even for international investors. Despite a minor decrease in transaction volume this year compared to last year, experts are confident that no significant downturn is imminent.
1. UK Property Market 2022: Here’s Where We’re At, And What Will Happen Next (suggested)
2. UK Real Estate 101: The 2022 Scenario
3. The Potential Performance of UK Property Market in 2022
Many investors are reviewing their present holdings as we look ahead to 2022 and wondering what the future may hold for UK real estate. In May 2020, The Bank of England predicted that the COVID-19 pandemic would cause a decline in real estate prices. They couldn’t have been more wrong.
Cut to 2022, the property market continues to prosper. The average property price increased to a record-high £276,759 in January 2022. According to experts, the housing market's rebound following the lockdown was caused by multiple factors, including pent-up demand, a shortage of available homes, people's desire for more space at home, low mortgage interest rates, and stamp duty holidays.
As we approach fall 2022, the world around us is changing. Read on to discover more about the UK real estate market projection for 2022 and potential changes.
Here’s what’s happening to the housing prices in 2022
House prices in the UK have risen by 5.6% in the first half of the year due to high levels of demand. By the end of the year, prices are projected to increase by a total of 9.0%. The phenomenal surge we've witnessed this year will likely be tempered by the continued expansion of transactions and prices, particularly if interest rates rise earlier than anticipated. Instead of a sharp price decline over the short term, this will result in a soft landing.
The market is likely to cool due to a variety of factors. The Russia-Ukraine war has made the cost-of-living crisis worse, fewer mortgages are being approved and the stamp tax holiday has expired. The Bank of England might raise interest rates, which causes an increase in mortgage costs, subsequently reducing demand for real estate. However, the Midlands and Northern England will likely see a considerable price increase in the coming months, primarily due to their greater capacity for expansion.
Regional variations in real estate prices
Property prices in the northeast of England increased by a record 13.3% in August 2021. In the same year, prices increased by more than £20,000 in the South East, South West, and East of England. London and Scotland witnessed the slowest growth. While prices in Scotland increased by 2.4%, they increased by 5.3% in London. In contrast, the rest of the UK had an increase of 7.1%.
If you plan to purchase a home in 2022, we would suggest doing some research on the local real estate investing trends to see how prices have changed recently and what the future holds. The North West and Midlands are touted to be England’s two fastest-growing regions. Prices are expected to rise by 28% and 24%, respectively, over the next four years.
Mortgage: Yay or nay?
The mortgage rates in the UK are still solid, although not as much as they were a few months ago. As usual, individuals who have the greatest down payments have access to the best mortgage offers. Before you zero in on a mortgage package, speaking with a mortgage counsellor might be a good idea since they often have access to deals that are not readily available.
It would be advisable to fix your mortgage rate while interest rates are still reasonably low right now. When interest rates started to rise in the past, those with variable-rate mortgages had the choice to switch to fixed-rate mortgages. However, this type of remortgaging is now much more difficult due to stricter affordability guidelines.
Rental price growth in 2022: an overview
The rental market has witnessed phenomenal growth in the recent past. In tandem with growing demands, rental rates are expected to rise by 9.5% by 2025. This comes after unusual price increases in several UK locations, including the East Midlands, which witnessed an 8% climb over the past year.
The UK property market prediction indicates that this rental growth is sustainable going forward since the UK economy is performing better than anticipated. With more and more offices opening up, people are looking to relocate. Many of these, especially young professionals, will be more than glad to rent as they attempt to restore their independence. Alternatively, people who are preferring a home office are also looking for properties which suit their increased needs better.
With the growth in rental prices, it is crucial to note that there are places across the nation where the monthly mortgage comes out less than the monthly rent. However, we anticipate an increase in rental prices in 2022 as a result of rising home prices and supply shortages.
Final Thoughts
Owning real estate in the UK has always been a popular strategy to safeguard assets, more since the pandemic. With limited supply and strong demand, UK real estate is virtually a "safe haven", even for international investors. Despite a minor decrease in transaction volume this year compared to last year, experts are confident that no significant downturn is imminent.