UK 2022 Property Market Predictions: Is Now the Right Time to Buy?

A good indicator of how the UK property market will perform in 2022 is by looking at the past 12 months.

With UK life still dominated by the pressures of the Covid-19 pandemic, and the Omicron variant appearing in late 2021, the future is still rife with uncertainty.

As such, by understanding how prices performed in 2021 during similar uncertainty, we can make some assumptions of how prices will grow in 2022.

2021: A Record-Breaking Year for Property Prices

Despite both Brexit and Covid-19 dominating the lives of many in 2021, the UK property market experienced a record-breaking year.

According to data from Nationwide, the average UK home hit a record high of £254,822 in December 2021, which is over £24,000 higher than in 2020.

In fact, over the 12 months in 2021, UK house prices increased by 10% on average, the highest growth in 15 years.

It was a similar story, according to Rightmove, which found that the price of new properties coming to market peaked at an all-time high of £344,445 in October 2021.

The Land Registry had equally positive findings, with their data (currently only available up to October 2021) showing that the average UK property is 10.17% higher than a year prior.

Alongside considerable property price growth, the rental market has also seen a considerable surge.

In April 2021, it took just 8.9 days for a rental property to be tenanted, which was down from 31.9 days in April 2019.

This has led to dwindling rental supply across the UK, with popular renting hotspots like Manchester now featuring fewer than 500 available rental properties for the first time ever.

Naturally, this surging rental demand has led to an increase in rental prices, with the HomeLet rental index finding that rent prices reached an all-time high in September 2021, hitting a monthly rate of £1,061 on average.

2022 Property Market Predictions: UK House Price Growth Returning to Normal Levels

After an exceptionally busy 2021, which saw the highest level of completed home sales and the strongest year for mortgage lending since 2007, house prices are set to stabilise in 2022.

According to Rightmove, house prices will increase by around 5% in 2022, with Savills offering a more conservative estimate of 3.5% over the next 12 months.

Industry experts believe the so-called race for space will stabilise in 2022, which may be the perfect opportunity for property investors.

In 2021, lifestyle changes amongst home buyers caused by lockdown led to an increased demand for rural homes, leading to a huge surge in property sales supported by massive tax savings from the stamp duty holiday.

However, Halifax has found that this trend has started to decrease, with the growth in the price of flats now outpacing the price of detached homes.

In fact, Halifax has reported that in November 2021, the average price of UK flats was 10.8% higher than 12 months prior, while detached homes were only 6.6% higher.

This has resulted in many workers returning to offices after working from home.

This data is likely great news for those looking to make a property investment, with clear signs that apartments and flats are coming back into fashion.