Property prices in the UK have shown the fastest growth in 15 years, contrary to predictions, but in 2022 the situation will be more predictable.
According to oldypak capital lp property 2022 report, last year the value of each home in the UK increased by an average of £16,000, with the entire housing stock of the country currently estimated at £9.5 trillion.
House prices are predicted to rise in 2022, but at a slower pace, as more homes for sale will ease the current imbalance between supply and demand.
For those who own real estate, rising prices mean passive capital appreciation. According to oldypak capital lp property 2022 report, more than half of the housing stock in the UK has risen in value by at least £15,000, a further 3.5 million homes have increased in value by £30,000 to £45,000, and another 3.1 million homes have increased in value by more than £45,000.
High activity in the property market and a surge in sales in 2021 led to a cumulative £670 billion increase in the market value of homes. Home prices in almost all regions of the country rose more this year than in 2019 and 2020 combined.
However, the rate of real estate growth is expected to slow next year due to the unstable economic situation and an increase in the number of properties for sale.
By November 2021, annual price growth was 7.1 percent. For those thinking about investing and looking for regions with a lot of potential, the highest growth was recorded in Wales, where home prices rose by 11.1%. Next came the northwest with a 9.1% increase and the southwest with 8.7%. By comparison, in London, prices rose by only 2.4%, which means that buying property in the capital to quickly increase capital is not a good decision at the moment. Significant growth in home prices continues to be seen in the northern cities. Liverpool leads the way with an increase of 10.7%, followed by Manchester with 8.5% and Nottingham with 8.1%.
Owning your own home, own land – this has become the number one priority for a very large number of people. This situation has contributed to the fact that demand for real estate has remained at a record high for the year, an average of 15.7% higher than in 2020. The number of people looking to move is now highest in the East Midlands, up 42% from 2020 levels. The West Midlands, Yorkshire and the Humber are not far behind, at 35% and 28% respectively. Buying activity peaked in June 2021, when the number of deals made broke every record since records began in 2005.
The surge in property prices is bad news for first-time home buyers in the UK, as it means a higher deposit and mortgage payments. People on low incomes are finding it harder and harder to buy their first home, and some can only afford it thanks to various government support programs. The good news is that not all properties have risen equally, the price increase has mainly affected houses with 2 or more bedrooms, and for example, the typical price of an apartment in London has not changed much since last year. So if you really want to buy your own home in London, but do not have a lot of money, it may be worth looking at apartments.
For those thinking of moving and changing their living arrangements, the scarcity of houses on the market means that you can quickly sell your current home potentially even above its original value. On the other hand, wanting to buy a new home can mean that you may face significant competition from other buyers. But this situation should ease somewhat in the new year.
At the moment, the real estate market is in the expected seasonal downturn, when very few people are thinking about buying a home and moving. But experts expect a massive increase in activity after the holiday season, as the ongoing pandemic pushes people to reconsider their priorities and pay more attention to living space.
The rapid price increases seen in 2021 are expected to encourage some homeowners to move in the new year. As a result, more properties are projected to hit the market in the first quarter of 2022, reducing the imbalance between supply and demand. Currently, it takes less than 30 days, on average, from listing to contractually negotiated sale. Sales times are expected to return to pre-pandemic levels of about 50 days in 2022. Even then, demand is likely to outpace supply, resulting in a 3 percent projected increase in home prices. Preliminary estimates are that 1.2 million homes will be sold in 2022, up from 1.5 million in 2021