One might argue that the Property Market defied expectations in 2020 and then exploded in 2021 putting it in a very healthy place. While it seems there is no shortage in demand – There are on average 19 buyers for every property on the market, the main issue facing Estate Agents in 2022 could well be getting sufficient stock to market to make hay while the sun shines.  

 Here at OneDome we’ve got our crystal ball out and have put together the trends that we believe are going to be the main talking points of 2022. 

  1. Surge in consumer demand to continue.
    December 21 saw the spectre of lockdowns return, the threat of increased restrictions and various plans to try and stop the spread of Omicron. This renewed focus on new variants was a stark reminder that we’re far from out of the woods – according to Sir Chris Whitty, we’re at least 18 months away. We expect the combination of the above to re-focus homemovers’ minds to what is most important to them leading to another mini surge in consumers serious about moving over the first quarter of 2022. 
     
  2. Rising inflation.
    Inflation is rising at an alarming rate. It is already at 5.1% and is predicted to hit a 30 year high of 6% in the Spring. Many consumers are expecting a real world pay cut as the cost-of-living soars. We expect there to be two primary knock on effects to this.

    a. Increased mortgage rates. The Bank of England increased the base rate from 0.1% to 0.25% and although this has to date only had a minor impact on mortgage rates, as the government battles increasing inflation and pandemic recovery it feels inevitable that The Bank of England will raise the base rate – possibly more than once. The Office of Budgetary Responsibility is predicting that mortgage interest costs will rise in 2022 and then again, by 13.1 % in 2023. The good news is, put in a historic context, mortgage rates are still comparatively low and there are good deals to be had but combined with energy and consumer goods price rises, consumers may well feel the pinch.

    b. Over the course of 2022, consumers are unlikely to be able to save as much month on month. Therefore the trend in 2022 may well be a decrease in the value of personal savings however, the reality is that this may have little impact on the property market in 2022 as anyone with serious intent to buy should have most of their deposit in place by now. The real impact of this trend will be felt in 2023 and beyond as consumers take longer to save and are unable to borrow as much.
     
  3. House Prices will continue to rise. 
    The most recent data from Nationwide shows that house prices have risen 10% in 2021 and they have risen 15% since the pandemic first struck in March 2020. We expect house prices to continue to rise in 2022 but at a slightly slower rate, around 6% nationally – even if there are currently 19 buyers for every property on the market!
    Based on data from Savills, the North-West and the Midlands will be the leading regions for growth. According to Savills, over the next 4 years we can expect to see prices grow by 28% in the North-West and 24% in the Midlands. 
     
  4. Will the race for space continue? 
    With the rise of remote working and people being forced or advised to work from home, there has been an exodus from cities to the countryside, as those who could afford to, prioritised green space and fresh air over a city lifestyle. 
    There seems to be some evidence to suggest that this trend is already waning with the average price of flats increasing and interest in London flats on the rise again.
    However, it is hard to see that every industry will return to a 5-day week in the office model. It is far more likely that those who can afford to will continue to move to commuter towns with greater space and greenery as the need to be in the office 5 day a week diminishes. Hamptons International told The Guardian that 63% of new properties in Tandridge in Surrey and Sevenoaks in Kent have been bought by Londoners and the ‘commuter belt’ has extended to towns and villages further from cities than has historically been the case.
     
  5. The year of cladding crunch
    While not strictly a trend it seems likely that the questions around who is going to foot the bill for cladding replacements will be answered this year. Michael Gove is singling out Property Developers to stump up the £4 Billion required to solve the cladding crisis. Gove has gone as far as pressuring Ulster Rugby Club to end its sponsorship agreement with Kingspan.
    Unsurprisingly, property developers are unhappy with the Government’s plans and claim they’re being unfairly singled out. The Government has set a March deadline for developers to agree to a plan, but this issue seems destined to end up in court as developers don’t want to foot what they believe is an unfair bill. By hook or by crook, this issue seems destined to be solved this year, and with this may come an influx of flats to the market that have over the last few years been difficult to sell.