Rightmove says strong buyer demand will carry into new year but ‘frenzied’ market of Covid pandemic to ease as more owners look to sell
The UK’s housing market is likely to return to more normal levels of activity in 2022 but will still be busy, with strong buyer demand carrying forward into next year and a rebound in the number of homeowners apparently getting ready to sell, according to Rightmove.
The property website said that following a “frenzied” 18 months, the market was heading for a “less frenetic” period, with a more even balance between buyers and sellers as more homes are put up for sale and higher interest rates take some of the heat out of buyer demand.
It said one sign of a return to more traditional conditions was its finding that the market had experienced its usual “December dip”, with the average asking price of a home falling by 0.7% – or £2,234 – over the past month.Advertisement
However, this UK-wide figure disguises regional variations: in London and Scotland typical asking prices have fallen by more than that – by 1.6% and 3.5% respectively – but in other regions such as the East and West Midlands, they rose by up to 1.6% over the past month.
It predicted that gross mortgage lending would peak this year at £316bn – up 31% on 2020 – then fall back to £281bn in 2022 before increasing to £313bn in 2023.
However, it added that mortgage arrears were expected to be 26% higher in 2022 than this year, hitting 102,000, compared with an estimated 80,800 in 2021, while home repossessions were forecast to climb by 267% to reach 7,700 in 2022, compared with an estimated 2,100 this year.
Its data follows a string of surveys that have depicted a property market that is continuing to defy many expert forecasts. Last week, the Halifax issued figures showing that average UK house prices rose by 3.4% in the three months to the end of November, the highest quarterly rate since late 2006. Rival lender Nationwide said prices continued to climb in November and were now 10% higher than a year earlier.
Rightmove said it was predicting a “closer to normal” market during 2022, though that did not mean it believed the sector was heading for a dramatic slowdown: it has already predicted that house prices will rise by 5% next year on a national level. However, it believes that “some of the edge will be taken off sellers’ pricing power” by increasingly stretched buyer affordability and a better choice of properties for sale.
The website, which claims to advertise 95% of all properties for sale, said requests from homeowners to estate agents to have their home valued were up 19% on this time a year ago. This suggested that “more people will be making a new year resolution to move”.
It added that buyer demand and market momentum “remain strong going into 2022”, with November’s data showing buyer numbers up by 41% on 2019, and 3% up on 2020.
Tim Bannister, Rightmove’s director of property data, said that an interest rate rise was likely next year, and that while a rate rise was often regarded as unhelpful to the market, “a slowing of the fast pace of sales, and associated pace of price rises, will help the return to more normality that will suit many movers”.
The stamp duty holiday announced by the government in July 2020 has been credited with fuelling a boom in the property market and pushing up prices.
Alongside the stamp duty holiday – which ended on 30 September in England and Northern Ireland – the market has also been boosted by a range of factors including government guarantees for mortgages and a pandemic-fuelled desire for a new lifestyle that has led many buyers to prioritise properties with bigger gardens and more room for working from home.
Rightmove said the average asking price of a UK home was now £340,167 compared with £342,401 a month ago. This estimate is very different to Halifax, Nationwide and Statista who all value property at below £300,000. The reason for the disparity is because Rightmove looks at the average asking price of property on their portal. Whilst Nationwide and Halifax are directly related to the average property valuations of their mortgage transactions. The link gives information on how different house price indices are calculated.
Within the UK there are areas which are expected outperform the average. As an investment company we focus on these areas to maximise investor return. There are Emerging hotspots in the greater Manchester area which are projected to perform very well. There is currently a Housing Stampede in the Northwest of England, and investors should focus on this region to see stronger growth.