The average price of a U.K. property is expected to increase 5% in the year 2022, as buyer demand surpasses supply, according to Rightmove.
The property portal predicted that London will see less price growth next year - 3% - while the most competitive markets of Scotland, the West Midlands, the South West, and Yorkshire and the Humber could see prices increase by up to 7%, according to a report released Wednesday in the U.K. The prediction is based on a house price predictive model that uses millions of supply, demand and pricing data points, as well as insights from Rightmove experts.
It has been a busy 18 months for the property market since the end of the first lock-down, with changed housing needs driven by the pandemic and the stamp duty holiday encouraging some movers to bring their plans forward, Tim Bannister, Rightmove's director of property data, said in the report. The stock of property for sale per estate agency branch is the lowest available as we approach the start of the 2022 market. The report said that buyer demand was up 40% compared with November 2019 and an additional 2% compared to the same time last year.
As buyers contend with higher prices, prices won't increase as quickly in 2022, despite positive growth predictions.
The slowdown in activity and prices is likely to be more visible in the second half of the year as base rate rises, higher inflation and higher taxes begin to weigh more heavily on buyer sentiment, according to Bannister. If sellers are too optimistic about their asking price in the first half of the year, they risk missing the most active part of the market. In the capital, buyer demand hasn't been as strong as in smaller cities and the country markets, and inventory is less stretched, according to the report. Price growth in London has been stymied over the past five years because of the newly implemented taxes, uncertainty over Brexit and the migration away from the city because of the Covid 19 virus. International buyers are finding attractively priced properties, both at the top end and lower down the price brackets, said Bannister, who said international buyers are more on the scene.