In a recent UK housing market forecast, Rightmove uncovers what changes the industry can expect throughout 2022.
The UK's leading online real estate portal and property website predict that by next year the UK average property price will increase by at least 5%.
The research was conducted by using a house price predictive model that analyses data surrounding supply, demand, and house prices.
House price surge across the UK
The findings show that buyer demand has increased by 2% compared to 2020 and is up by a staggering 40% in comparison to November 2019.
When interested in listing a property for sale one of the first steps homeowners take is a home valuation. Rightmove reports that in November this year the number of agent valuation requests increased by 19% compared to November 2020.
Scotland, the West Midlands, Yorkshire, and the Humber, and the South West are the most competitive markets in the UK. As a result, these locations are expected to rise to 7% in 2022.
The buyer demand for properties available for sale is a lot weaker in London compared to different parts of the country as the capital is set to rise at a lower rate of 3%. The cause of a lower rate in London could be a combination of Brexit changes, additional taxes for overseas buyers, and changes to migration for domestic and international movers.
Rightmove’s director of property data Tim Bannister further explains: “While London overall will continue to be a price drag on the national average, there will be hotspots and cooler spots as its own unique and diverse markets continue to operate at different speeds. International buyers have been more on the scene, and both at this top end and lower down the price brackets, buyers are finding some attractively priced properties as the combination of London’s post-boom rebalancing and Covid effect changes on supply and demand in its many sub-markets plays out.”
The supply and demand imbalance coupled with a strong buyer demand are the main reasons for the house price increase. A larger supply of new properties approaching the market should help slow down the rate of house prices increasing.
Bannister concludes: “It’s been a hectic 18 months for the property market since the end of the first lockdown, with changing housing needs driven by the pandemic inspiring many moves, and the stamp duty holiday encouraging some movers to bring their plans forward. The net result as we approach the start of the 2022 market is the lowest ever available stock of property for sale per estate agency branch, yet with ongoing high buyer demand. This imbalance between supply and demand has resulted in buyer demand per available property being at near-record highs, suggesting that the 2021 scenario of multiple buyer bids on a high proportion of properties when they come to market is set to continue in the new year.”
“We do, however, expect the pace of rises in 2022 to be slower than in 2021 due to increasingly stretched buyer affordability following this year’s rapid rises in average prices. Slowing in the pace of price rises and activity is likely to be more evident in the second half of the year as base rate rises, higher inflation, and higher taxes begin to weigh more heavily on buyer sentiment.”
“Therefore if sellers are too optimistic on their asking price in the first half of the year, they risk missing the most active part of the market. While local markets vary considerably in their supply-demand imbalance, Rightmove’s unique access to this detail and scale of data underpins our forecast for overall continued upwards price pressure in 2022 despite the prospect of base rate rises.”