2021 was a bumper year for the property market. A combination of a number of factors – including the Stamp Duty holiday and pent up demand following Covid lockdowns – lead to the average UK house price increasing by 10.2% in 12 months. By the end of 2021, the average house price in England climbed to £285,000, according to the Office for National Statistics (ONS).
Here, Claire Egerton takes a look at the year ahead and the factors that might affect the property market.
According to commentators, buyer demand remained high in the latter stages of 2021 – with the predicted fall off from the end of the Stamp Duty holiday in September 2021 not materialising. The number of new prospective buyers in the UK in the final two months of 2021 was reported to be 63% higher than the average level between 2015 and 2019.
The impact of the pandemic on the way we view our homes and how we live in and use them is likely to remain an important factor going into this year. With the time spent on the commute to work being a less of a priority for many, homes in more rural locations and houses with more space and bigger gardens continue to be in greater demand.
Our local area of Saddleworth and its surrounds, which has always had a strong property market, experienced a surge in demand during the pandemic due to its many advantages for potential buyers – being semi-rural, near the Pennines and yet with easy access to Manchester and Leeds.
December 2021 saw The Bank of England raise interest rates from 0.1% to 0.25%. Although still at a low level, allowing mortgage rates to remain attractive for the time being, further increases in the months ahead have been signalled, which would of course make it more expensive to buy a house.
Another factor in the picture is inflation, which hit 5.1% in November 2021 and some economists expect to reach 7% this year. Few will be able to escape the impact of inflation of their everyday finances, and as the cost of living increases, this could curb demand from home buyers.
Hold ups in the supply chain of building materials have been well-publicised over the past 12 months or so. However, the Developers we work alongside have soldiered through completing record numbers.
The supply of existing housing stock to market has also been relatively low compared to demand – impacted by the increase in people buying property up as second homes.
It is hoped that some of the pressures being felt by housebuilders will begin to ease this year. This could contribute to a more equal level of supply and demand.
Although there are still many factors at play – along with ongoing uncertainty around Covid and the ever-present threat of new variants – there is largely expected to be a period of stabilisation in the property market in 2022, with price increases returning to a more sustainable level.
The conveyancing team at O’Donnell Solicitors, including director Claire Egerton, Julian and Nicola, live locally and have the benefit of local knowledge to pass on to clients. Saddleworth is home to lots of quirky, unusual properties, which can give rise to unusual titles and other legal issues. We have years of experience dealing with transactions in the area, which ideally places us to assist clients and avoid any potential delays.