Property

Average UK property values predicted to increase by 3-5% during 2022

Property Reporter
|
8th December 2021
For Sale 313

Average house prices are expected to increase by 3% in 2022, with this figure rising to 5% in higher value country markets, according to the latest forecast and market analysis from Jackson-Stops.

According to the national estate agent, this prediction is based on the assumption that interest rates rise marginally, and Stamp Duty Land Tax remains at the same rate. The effects of the pandemic on the housing market will continue to be an underlying factor throughout 2022, with country homes set to be in high demand and short chains likely to occur across the regions that house hunters and renters alike flocked to in 2021.

58% of the firm’s branches predict chains will become shorter in 2022, due to a higher volume of cash buyers in circulation and an influx of purchasers returning to the sales market from rental. This will be particularly prominent in the South West of England; the latest analysis of nationwide sales data reveals there are currently 23 buyers chasing every newly listed property here.

Whilst demand will continue to outstrip supply in Q1 2022, fresh sellers are set to list their homes later in the year, levelling out the stark imbalance between supply and demand which dominated the 2021 housing market.

Nick Leeming, Chairman of Jackson-Stops, comments: “Lack of supply governed the 2021 housing market, with our latest data revealing that nationally there are currently 19 buyers for every newly listed home. These strong market conditions caused some sellers to delay listing their property for sale until they felt confident that they would find a suitable next home. An increase in new listings, fueled by homeowners realising the extent to which their properties have risen in value over the last two years, will convince these previously cautious vendors that there are viable onward properties. We should therefore see a steady flow of new stock coming to market by the second half of the year.

“We anticipate only minor upward movement in interest rates as inflationary pressures increase but this will do little to dampen transaction volumes which are set to remain stable.

“Over half of our network expect that the average property chain will be shorter next year. This will be particularly prevalent in the South West, with chains shrinking to as few as two links for many sales in the most saturated markets, such as Devon. Shorter chains bring more certainty to the housing market which in turn will boost buyer and vendor confidence.”

Private sales in the country homes market

A reassessment of property requirements will continue to fuel the country homes market throughout 2022, with prices set to rise by 5% across higher value price bands. Those homeworkers who remain unaffected by the reopening of their offices will now have the confidence to make a permanent move to a more rural location. These factors, coupled with a desire for more space, will ensure the rural homes renaissance continues throughout 2022.

Flexible living spaces will be key next year, with house hunters chasing properties with ancillary buildings rather than multiple bedrooms. These outbuildings will be in high demand as buyers seek to convert the space into work areas, gyms, hobby rooms or a source of additional income. Green credentials will also be at the forefront of homeowners’ minds.

Nick, adds: “Complex and ongoing changes to the nation’s working patterns and lifestyle aspirations will continue to fuel the country homes market in 2022. Buying a home is a long-term commitment and with lockdowns still fresh in people’s minds, house hunters are looking for properties that are more flexible, spacious and rural than where they lived pre-pandemic. Nearly a third (30%) of Jackson-Stops branches reported an increase in buyers requesting homes with easy access to open countryside with scenic walking routes.

“There is still a large number of people who lost out on buying their countryside home this year due to strong competition in the market. Many of these house hunters are now in rented homes and are keen to buy a permanent base in the areas they have tried and tested over the last 12 months.

“We expect property owners to be more focused on increasing the energy efficiency of their homes in the face of rising energy costs. In particular, country homeowners may consider installing ground source heat pumps, or other measures that in the long-term may bring energy costs down, whilst also reducing their carbon footprint.”

Nearly every Jackson-Stops branch (91%), from the North West through to the West Country, agrees that home offices and fast broadband connectivity will continue to be at the top of house hunters’ wish lists next year, with many noting that buyers want these working facilities to be located outside the main house in outbuildings or a garden office.

Jonathan Weeks, Director of Jackson-Stops’ Norwich branch, comments: “With the work from home trend here to stay, house hunters no longer have the same ties to large cities. The countryside continues to offer excellent value and a lifestyle that many have wanted but had been unable to enjoy whilst previously chained to their city-based desks.”

Meanwhile, a renewed love of British boltholes, coupled with ongoing uncertainty around international travel restrictions, will support transaction volumes in the second homes market.

Ben Standen, Director at Jackson-Stops’ Truro branch, comments: “Covid concerns and extra bureaucracy in terms of international travel will keep the UK’s hotspots busy during 2022. Many of our second home buyers are seeking escapism - being surrounded by greenery, sea air and coastal views can make a really positive impact on wellbeing and can encourage a happier and healthier lifestyle.”

Private lettings in the country homes market

The country house lettings market will continue to gather momentum throughout 2022. Off-market rentals and price competition will not be uncommon in the family homes market as a lack of new rental property creates upward pressure on rents.

Paula Bereznyckyj, Head of Residential Lettings at Jackson-Stops’ Newmarket branch, comments: “If the last 18 months is anything to go by, rental levels will continue to rise throughout 2022 due to the high demand for properties and the shortage of homes available. We have had a number of listings where tenants have actually offered more than the asking price to try to secure the property they want.

“This has been particularly prevalent in the family homes market. Recently we have been inundated with enquiries on new listings and many properties are being let without even going to market as we have so many tenants waiting for larger properties. A recent new listing generated about 40 enquiries in just two days.”

London private sales outlook

Harry Buchanan, Director of Jackson-Stops’ Pimlico & Westminster branch, comments: “We are expecting the 2022 market to be extremely busy across London. Buyers will be attracted back to the quintessential British character that is so prominent across the Capital’s prime housing stock. This, coupled with competitive mortgage rates will put upward pressure on demand.

“Boomerang buyers will continue to feature throughout the year. Many who have purchased a home in the country in the last 18 months will now be on the hunt for a complementary pied-à-terre which they can use for one or two nights a week.”

New Homes outlook

New homes with strong eco-credentials will continue to be sought-after, as buyers become far more conscious of their carbon footprint, and in turn, look to benefit from long-term low energy costs. Furthermore, spacious living areas, with separate homeworking spaces and gardens will be in high demand. Buyers will be varied throughout the year across the new homes market, with this diversity peaking in the East of England with strong interest registered from young couples, retirees and families alike.

Sarah Walsh, Head of New Homes at Jackson-Stops’ Ipswich branch, comments: “An increasing number of tenants now have pets following lockdowns, we’re now seeing this translate into house hunters prioritising outdoor space which goes beyond a balcony when searching for a new home. We’re also expecting the market to be extremely varied and have strong buyer demand next year, we have had everyone from downsizers to upsizers, retirees to young couples and those moving from abroad with family registering their interest to buy. Every single buyer has been completely different, and even at developments with a fairly consistent style of product, the buyers don’t follow a particular trend in where they’re coming from or their motivations to move.

“There is a clear desire from house hunters for homes with energy-efficient appliances, with a quarter of buyers now referencing green credentials in their property search. This, in turn, is becoming a key element incorporated in new homes, which I believe will only gain greater significance as we move forward through 2022 and beyond.”

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