UK property sector predictions

16 Dec 2021

No-one has a crystal ball, clearly, but there are some pretty sure forecasts for the UK property market for 2022. Despite many downbeat outlooks at the start of the year, Britain’s housing market has remained resilient. Sales were buoyed by the stamp duty holiday, and demand was strong for all kinds of properties, including buy-to-let and large suburban homes. So, what’s next in the year ahead?
UK rental market in 2022
Renting was on average less expensive than buying in terms of monthly payments, according to official UK data, and as such, the rental market has continued to be strong. JLL, the property and portfolio firm, expects that rental prices will grow by 9.5% by 2025, as the sector continues to grow in tandem with demand. This is following on from exceptional price rises in a number of UK regions, particularly the East Midlands, which saw 8% over the last year – the leading growth in the country. With the UK economy doing much better than anticipated in regards to unemployment and GDP growth, the UK property market forecast suggests that this rental growth will remain going forward.
Property prices on the rise (still)
Property services firm Leaders Romans Group says that house prices across the UK will continue to grow in 2022, with around a 3% rise over the year. Some of this could be triggered by a widening gap between demand and stock. Some landlords in the private rented sector may have already sold, or be planning to sell, to benefit from the house price rise.
UK Supply and Demand
Demand from buyers for UK property remains robust but supply has hit an all-time low. “Sales agreed year-on-year has risen by over 30% across the UK, while exchanges have also increased by 55% – a clear signpost of how quickly demand is outstripping supply,” says Seven Capital. According to TwentyCi, the estate agent, listings have dropped by 50% to normal levels, while “530 UK districts have housing stock levels below two month targets.”
Regional Performance
Savills predicts that the North West and the Midlands will be the top English regions for growth over the next four years – seeing 28% and 24% price increases respectively. In 2022 specifically, the real estate firm has forecast growth of 4.5% and 4% in both of these regions. Looking ahead, growth in the UK – particularly in regional cores – will likely be determined by interest rates.
Slowing of the ‘frenzy’
Rightmove, the realtor, predicts that the property market, which has experienced a boom during the pandemic as people looked to change their lifestyles, would get back to more normal conditions during 2022.  Tim Bannister, director of property data, said: “The kind of frenzied market we've seen in the last 18 months happens only a few times in most home-owners' buying and selling lifetimes, exacerbated by the even rarer event of a global pandemic pushing homes higher up most people’s priorities. While the pandemic is still having an ever-changing impact on society as we head into the New Year, we expect a housing market moving closer to normal during the course of 2022.  With a jump in the number of owners requesting valuations from agents with a view to marketing their homes, it looks like many of this group are now gearing up to make it a New Year resolution to move.”