2020 and 2021 have been turbulent, to say the least. With the coronavirus pandemic, Brexit, and COP26 influencing housing policy nothing has been predictable. However, the UK’s housing market has remained remarkably resilient. For both property investors and homeowners, bricks and mortar have still remained appealing for investment.
Although, people’s emotive buying behaviour has changed due to covid. Both estate agents and builders have seen a growing trend for properties as people reassessed their housing needs, especially during the lockdown. Once before city centres, good facilities, shops, and restaurants were a priority. However, research has found individuals are now moving towards more rural and urban areas. It was found that 10% of British people have moved away from a city due to the coronavirus pandemic. Additionally, 24% considered the move with 44% saying the pandemic has made city living less appealing. Research conducted by Zoopla concluded that 22% of individuals were ‘eager’ or ‘very eager’ to move home within the next 18 months as a direct result of the pandemic.
Is There A Fall Within The Property Market On The Horizon?
With the enforcement of working from home, many office workers are now looking for a more suburban lifestyle with greener and space to settle. This has then left many office spaces have been left empty. Additionally, this trend will continue to grow as businesses become more flexible and accustomed to this way of working.
However, due to the end of furlough, rising inflations, the final stamp duty holiday ending, increased tax, and increased living costs, it is predicted that there may be a fall on the horizon. According to the latest HM Land Registry UK House Price Index report, house prices increased by 2.5% between September and August. Reporting there was an annual increase of 11.8% equating to on average £269,945 in September. Across the UK, the North West showed the greatest growth rate of 5.3% with London being the hardest hit throughout the pandemic.
Rightmove’s director of property data, Tim Bannister, stated there will be “A return to a less frenetic property market due to more choice, and forecast slightly higher interest rates, will suit many movers who have held back during the last 18 hectic months.” While Zoopla claims “House price growth is forecast to run at 3% by December 2022, in comparison to a rate of more than 6% now.” Therefore, resulting in 20% fewer property sales. Add this to the short supply of building materials due to Brexit and COVID, will the market change in 2022?
House Prices In 2022
According to Athena Hubble, managing director of property portal Boomin, “Looking ahead, there is likely to be an impact from the end of the Government furlough schemes over time, that could trigger more homes coming to the market, with downsizing and selling off from rental homes as key drivers. Financial impacts are likely to see rental demand continue to grow with rentals now cheaper than buying (outside of larger deposits). However, demand is likely to continue to support price inflation, delivering a lower but consistent rise across the UK in 2022.”
How Can BLG Help?
As a principal lending specialist in property development finance, we are positioned to help you. Providing residential and commercial finance ranging from £1 million to £15 million we have the ideal skill set to lend and advise. Priding ourselves on fast decisions and flexible terms we can aid you through these turbulent times. Contact our financial experts today who will take time to get to know you and your aims.