Top UK agents reveal 2022 property market predictions
News & LegislationJanuary 21, 2022
Top UK agents reveal 2022 property market predictions
Since the pandemic began in 2020, the property sector has experienced immense change and adaption. As we set on our journey into 2022, many might be wondering what this New Year will bring for the sector and the market.
We spoke to a few Members of The Guild of Property Professionals about their predictions for 2022 and the property market moving forward.
A repeat of 2021?
Simon Bradbury, Managing Director of seven-branch Thomas Morris Sales & Lettings in Cambridgeshire, Hertfordshire and Bedfordshire, says: “As with any predictions about the housing market in the UK, there is a huge amount of uncertainty when it comes to anticipating what may or may not happen in 2022 - particularly in view of what impact the Covid situation may have and the expectation that there will be no further boost in respect of Stamp Duty exemptions in the year ahead.
"There are undoubtedly some general economic headwinds that need to be factored into any predictions. These include an expected increase in interest rates, higher rates of inflation, continued Covid restrictions and general economic uncertainty as the consequences of Brexit become clearer - probably!
"I would suggest that the rental market in 2022 will probably be a repeat of 2021 – a gradual increase in rents with volumes remaining about the same. As for the sales market, I expect that volumes of housing transactions across the UK will reduce from the anticipated 2021 figure, of 1.5 million, to a more modest 1.2 million and that this 20% reduction will be broadly reflected in our own Eastern region. This reduction will be mainly due to the continued lack of instructions, which will, in turn, impact house prices which I expect to increase by a UK average of 7% and a regional average of approximately 6%.
"The two big themes of 2022 for the property market will be a continued lack of instructions and a general increase in interest rates."
"Levelling off" in 2022
Charlotte Demaine from Edkins & Holmes Estate Agents, comments: “Looking forward to 2022, I am confident that it will continue to be a sellers’ market for the first quarter. As the year progresses, I think property prices will begin to level off as more properties come to market and property price increases will begin to slow down, however, I feel overall the market will remain strong throughout 2022. The lack of properties available for rent means that the cost of renting continues to increase – great news for our landlords but not so good for people looking to rent.”
2022: the post-pandemic year
Rowan Waller, Managing Director of Wallers Estate Agents, shares his comment on the market: "2021 was an extraordinary year, but it was very much a game of two halves, with a huge surge in transactions prior to June 30th, and then what felt like a trickle by comparison taking us through the second half of the year. 2022 however, I expect to be very positive. I believe that this will be the ‘post-pandemic’ year – not because Covid will disappear in reality, but so far as public sentiment goes. The mood already seems to be one in which the public wish to ‘get back to normal’ and this has brought a renewed sense of consumer confidence that has seen our activity levels jump fifteen-fold month on month, and in fact, we are currently running ahead of where we were this time last year, which seems extraordinary. House prices have risen by almost 10% in the space of 12 months, and with stock levels still low and buyer appetite high, it will take a lot more than a couple of base rate increases to keep a lid on rising prices or on buyer demand."
Sustained growth over the next 4-5 years
jdm Estate Agents comments on the previous year and shares predictions for the next few years: "2021 has been a year of exception with unprecedented and frenzied levels of activity in the property market. This has been artificially bolstered both by the stamp duty holiday as well as a general pandemic-driven trend for the reassessment of housing needs and lifestyles.
"Thankfully we start 2022 with a strong, economic recovery, low interest rates and high employment rates. For the property market this has meant that we have seen no slow down in demand for property but a significant lack of supply, which will see prices continue to increase until the stock levels are replenished.
"From a general perspective, many economists and property experts work on the basis of an 18-year property cycle, which suggests that we are about to enter a period of sustained growth over the next 4-5 years. This theory coupled with strong economic conditions and restored confidence in the UK property market should encourage investment and underpin an active and stable property market for 2022."
Rent now, buy later
Andrew Simmonds, Director at Bristol-based Parker's Estate Agents, said: “Although prices this year will grow at a slower rate than in 2021 due to rising rates, taxation and the energy crisis, the market certainly won't go off a cliff due to the lack of supply. I am expecting to see many vendors sell and move to rented with a view to onward purchasing later in 2022 or 2023.”
Advice for home seekers
According to John Newhouse, from Roseberry Newhouse in Stokesley, early signs in the market indicate high demand and low stock availability similar to 2021. “Looking for the ideal purchase or rental will have its challenges and I would advise buyers and tenants to work closely with their estate agent. Landlords will continue to enjoy a choice of tenants to suit their need. And sellers may continue to expect premium prices but should be wary of overzealous price guidance,” adds Newhouse.
Zoe Napier, Director of The Zoe Napier Group, says: “The message we have for buyers is once you have decided to move, get yourself in a position of strength from already having a buyer and complete chain behind you. Alternatively, if you are fortunate enough to be a cash buyer, to have proof of funding available and even demonstrate this to any selling agent at the earliest possible opportunity. For those requiring a mortgage, then ensure to obtain an advanced ‘approval in principal’ – a document which can be made readily available by most lenders of mortgage brokers. This will be requested by any agent at point of offer and those first off the block with their evidence can place their offer, strong intentions, readiness to co-operate and commitment are in an advantageous situation.”
Wales: Demand continues to be strong
Director of Kelvin Francis Estate Agents in Cardiff, Kelvin Francis, says that the residential property market in Cardiff has remained buoyant throughout 2021 and the early signs are that this is continuing in 2022. “Large numbers of requests for valuations and instructions are being received after the festive period, indicating continuing optimism and confidence in the market. Values for the most attractive properties have proved strong, with large numbers of viewings leading to several offers, often having to go to sealed bids, achieving prices which on average are 5% to 10% over the asking prices,” he adds.
"The average house price in Cardiff for 2021 is £289,596 showing an average annual change of 16.5% increase. Demand is particularly strong in the popular two-bed starter homes and traditional three-bed, semi-detached dwellings, where continued pent-up demand has led to a record level of viewings for most listings. In the rental market, rents have increased on average by 20%, which has encouraged many established landlords to increase their portfolio, competing with would-be first-time buyers in the sales market, adding fuel to demand and house price increases."
Francis continues: "Many housing analysts are predicting a 5% increase in house prices for 2022. However, we feel that in 2021, house prices increased on average by 15% plus, which cannot be sustained, so our view is that house prices for 2022 will stabilise and at best increase marginally by 1% or 2%."
South-East London and Kent borders: Renters still seek the quiet life
Dr Jak Kypri, Director of Harpers & Co, based in Bexley Village, expects 2022 will continue to be buoyant for residential sales as demand will continue to outstrip supply. "The draw of South London and Kent's excellent schools will also draw buyers from outside of the area and strengthen values. The year ahead is not likely to be as fizzy and frenetic as the previous year, but demand and low interest rates will continue to provide good transaction levels in sales and lettings.
"Renters and landlords will continue to enjoy strong demand in the lettings sector but will also face some challenges from increased taxation and reduced incentives to let property, with the government seeing professional landlords as a useful funding stream to help plug the country's financial deficit. The south and Kent will continue seeing buyers and renters wanting a quieter life with less emphasis on the daily commute and grind with semi-rural and "quality” living uppermost in their minds."
jdm Estate Agentsalso comments on the South-East London and Kent region: "Locally, we have seen an increase in the number of homeowners making market appraisal requests with a view to selling and therefore we anticipate greater levels of fresh properties coming to market. This should help temper the imbalance between supply and demand leading to a more stable market for the remainder of the year and will support the predicted steady growth in house prices which is predicted at 5% for 2022."
The flat/apartment market:
jdm Estate Agentscontinues, "One notable exception to the recent trend has been the flat/apartment market, which did not experience the same price growth over the last 18 months. The reason for this has been three-fold: pandemic changes to lifestyle with people wanting work from home and outside space; a challenging environment for first-time buyers including lack of higher LTV mortgages and affordability/inflationary pressures; and general difficulties and inconsistencies in the treatment of EWS1/cladding requirements by lenders. The knock-on effect of this was that we saw the prices of flats drop in value for a period of time. The flat market continues its recovery with many more first-time buyers back in play thanks to an increase in the availability of mortgage products and a return to “a new normal” post pandemic. A further boost is expected from new government guidance around the requirement for EWS1 forms which will see common sense lending on flats restored across the industry. Flat availability is still more abundant but we should start to see this sector converge more in line with the growth that house sales have recently experienced."
Essex: A great start to 2022
Zoe Napier, Director of The Zoe Napier Group who specialises in selling unique homes in Essex, says: “The new year has started with spring in its step with an increased level of buyers leaving London and the city suburbs for that lifestyle move. Essex offers a surprising amount of beauty in the villages, coastal and rural areas and property prices in these areas continue to rise, not least due to the number of proceedable buyers bidding on any single property.”
Oxfordshire: Student-let competition
Managing Director of Wallers Estate Agents, Rowan Waller, comments on the local Oxfordshire market: "I believe we will see more landlords beginning to offload rental properties from their portfolios as tenancies come to an end throughout the year, particularly those that have traditionally been let to students – in part due to the legislation changes around EPC rating requirements, although still a way off, but also due to the numbers of university-built new-build student accommodation which now offers stiff competition. With prices at their current height and buyer demand up as it is, it makes sense. It will be interesting to see what property-related tax changes or public spending commitments come in the chancellor’s budget, particularly as by the time we get one, Sunak might be prime minister rather than Chancellor! I still expect to see a permanent reduction in stamp duty come in, but then I always do. One day I’ll be right."
Staffordshire: Continued growth
Angi Cooney, Director of C Residential, expects continued growth in the Rugeley market going forward into 2022. “In March 2021, the iconic Rugeley Power Station towers were demolished to make way for an exciting redevelopment of the total site, which will incorporate 2,500 homes of various designs plus a new school for all years, from the age of 3 to 18. The site is a significant brownfield site creating a logical extension of the East of Rugeley Strategic Development Area (SDA) within Lichfield District Council’s local plan strategy and Cannock Chase Council.
“There are plenty of opportunities in the area for industry, and there are exciting times ahead for this part of Staffordshire, which boasts two railways stations serving either the north or the south of the UK. We are nestled on the edge of Cannock Chase, which is an Area of Outstanding Natural Beauty.
“The property prices are still relatively competitive, and I would welcome the chance of speaking with anyone interested in moving to this area."
Hastings and surrounding areas
Sales & Marketing Manager at John Bray, Colin Darbyshire, comments on the local market in Hastings: "As we move into a new year, buyer demand remains strong in Hastings and the surrounding areas. Being experts in both sales and lettings, we cover areas such as Hastings, where our office is located, through to St Leonards, Bexhill, Battle, Fairlight, Westfield Village, Sedlescombe and even Rye. With stock levels still relatively low, it remains a seller’s market and the likelihood is that house prices will remain high throughout 2022. Numbers of valuations, and in turn new sales, are back on the increase as people come out of Christmas and into a New Year of resolutions and desires to move and make changes. This should be at a much steadier and more considered pre-pandemic pace.
"The end of the stamp duty holiday in 2021 predicted a drop off in homebuyer demand. While there was a drop off from mid-December until the new year, demand has been steady and is picking up pace again. Predictions are that property prices will increase nationally by 2.2%. However, given our coastal and country location within East Sussex, demand from an influx of new buyers continue to push demand and house prices.
"The latest Covid variant (Omicron) appears to be less severe than its predecessors. This however, has not stopped the general public in wanting to move further afield, get more for their money and perhaps a better quality of life. The ‘working from home’ initiative remains and provides the opportunity for a better work/life balance for many. As such, the demand for properties in and around Hastings is high, with buyers from the likes of Brighton and London renting short term to get a feel for the area, with an aim to buying when there is a greater selection of properties available for sale. This has pushed the prices of rental properties up significantly.
"Our statistics and diaries show that there has been increased interest in seaside towns and villages, such as Hastings, as desirable places to live. Whilst the train line into London, or at least the section running into Tunbridge Wells, has never been great, people are prepared to take the hit on a slow journey to work, if it means only doing it a few times a week or month. More space at home, especially for working, has never been more important.
"We expect to see a busy 2022. Whether that leans towards rentals or sales remains to be seen, but we expect a steady and more considered increase in both."
Yorkshire: Homes selling above asking price
Annie Allen, Sales Negotiator at Moss Properties, shared her predictions for the property market in 2022: “Last year was a crazy year for the property industry and the New Year seems to have continued with the fast pace of 2021.
"House prices in the Yorkshire region increased by 11.8% and the average sale price was £269,945, therefore I do predict the increase in house prices will slow down this year due to interest rates, but we will still see a slight increase. The demand for both detached and semi-detached properties in the Doncaster area is still very high, which is resulting in these properties selling above the original asking price and ultimately pushing that slight increase. Doncaster also saw a higher level of interest from southern investors, which I suspect will continue into 2022 and the number of available properties to rent increasing in Doncaster. With Doncaster Council hoping to gain city status this year and the growth in industrial businesses in the area, it will also create a higher demand for rental properties, which is great news for current and prospective landlords.”