Will property prices fall in 2022?

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House prices: Expert discusses 'interesting' pricing differences

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House prices in the UK increased by 2.5 percent in September from August, according to the latest HM Land Registry UK House Price Index report. The data found there has been an annual increase of 11.8 percent with the average UK property valued at £269,945 in September. The North West reported the greatest growth rate – rising by 5.3 percent. But will this rate of growth continue into 2022? Express.co.uk speaks to property experts about predictions for the market in 2022 and whether house prices will continue to soar.

The pace of property price growth is forecast to slow in 2022 due to “headwinds”, according to Zoopla’s latest house price index.

The online property platform said factors including higher mortgage rates, soaring living costs and increased taxation will contribute to this slowdown.

House price growth is forecast to run at three percent by December 2022, Zoopla claimed – compared to a rate of more than six percent now.

As a result, there could be around 1.2 million property sales in 2022, 20 percent fewer than the 1.5 million seen this year.

Will property prices fall in 2022?

There is likely to be a “lower but consistent rise” in house prices across the UK in 2022, according to Athena Hubble, managing director of property portal Boomin.

Ms Hubble told Express.co.uk: “On the path to recovery, the continual rise in house prices has shown signs of calming as we near the end of 2021.

“Looking ahead, there is likely to be an impact from the end of the Government furlough schemes over time, that could trigger more homes coming to the market, with downsizing and selling off from rental homes as key drivers.

“However, demand is likely to continue to support price inflation, delivering a lower but consistent rise across the UK in 2022.”

Specific areas will see growth in 2022, while others see a continued decline.

The London property market has been hardest hit throughout the pandemic.

The Government’s House Price Index for September showed the lowest monthly and annual price growth falling by 2.9 percent in September from August.

Annually, prices rose by 2.8 percent in London, which was the lowest of any region in England.

Ms Hubble said the London market is now appealing for investment as workforces slowly return to the capital due to the higher wage brackets.

She added this could prompt a “bounce-back in prices”, particularly in the London suburb areas.

“Even with a rate increase or two in 2022, this is not likely to derail buyer sentiment,” she said.

“Overall in UK housing terms, an expected rise of between four percent and five percent in overall house prices is expected.”

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Predominantly the balance of demand and supply in each area is key to determining the rate of growth, insurance agency HomeLet claims.

Matthew Carter, group head of marketing at Homelet, told Express.co.uk the pandemic prompted a rise in demand for more space (both indoor and outdoor) after people were trapped inside during the first lockdown.

Ultimately demand, coupled with lower stock levels for certain types of property, are driving up prices in both the housing and rental markets.

Mr Carter said: “The concern is that we’re at a point where there are some areas with exceptionally high demand – whether this will continue to be the case next year remains to be seen.”

Rental prices are expected to rise in 2022 as well.

Ms Hubble told Express.co.uk: “Financial impacts are likely to see rental demand continue to grow with rentals now cheaper than buying (outside of larger deposits).”

She added: “House prices have remained very high, and we believe that it is very likely that we will see the private rented sector playing a more important role in the UK’s housing supply, with many struggling to put together a deposit for a home.

“That said, one trend that could perhaps impact house prices is that we are seeing an emerging generation who are renting by choice, preferring a more outgoing lifestyle to save for a home.

“It will be interesting to see whether this portion of the market continues to grow in 2022.”

Mr Carter agreed with this assessment and said landlords and the lettings market has been hit by a raft of changes in legislation.

They added almost five million people are in the private rented sector and demand in many areas will continue to outstrip supply.

This may lead to “rental prices growing beyond rates we’ve ever seen before”.

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