The average property price could still grow by up to 7 per cent in 2022, according to one forecast – as separate research revealed that Merseyside and Lancashire towns have seen the biggest collective price growth since the pandemic began.
High-end estate agent Strutt & Parker has predicted that prices will increase by 7 per cent next year in an ‘best case’ scenario, though it also made a ‘downside’ prediction of 2 per cent growth.
The value of a home hit record highs during the pandemic as buyers searched for more space and benefited from the stamp duty holiday, which enabled them to save up to £15,000 in taxes between July 2020 and June 2021.
Agent Strutt & Parker’s most optimistic forecast suggests 7% house price growth in 2022
According to the report, UK house price growth was 10.3% from September 2014 to September 2020, which is the highest level since September 2014.
The number of housing transactions during the same time period was 442,930. This is the most since 2007.
Many predicted that with the ending of stamp duty holiday, and the potential for an increase in mortgage interest rates, house prices would slow down. But this is still not the case.
Strutts forecasted that the average home’s value would rise by 20 to 35% in the five-year period from 2025. – a forecast that has remained unchanged since its last quarterly report.
Guy Robinson, head of residential at Strutt & Parker, said: ‘The residential market has made a significant recovery in the last 12 months.
“This is due to the high level of demand in the market, attractive mortgage rates and the confidence that buyers and sellers have gained from the rebound in economic conditions.
“Following substantial house price growth over the past year, and rising at an rate not seen in seven years, there is a positive outlook for 2022.
“It is not clear, however, how much the changes in lifestyle and behaviour will translate into permanent shifts of market demand.
This optimistic forecast is partly due to the robust housing market, that developed in both rural and regional areas since the outbreak of the pandemic.
Between January and September 2021, the report said that the number of sales in locations outside of London were up 37.5 per cent year-on-year – though in 2020 the housing market was closed for two months during the first national lockdown.
According to the report, housing transactions grew the fastest in Scotland, South West England and East England. It also predicted that the market would remain dominated by well-connected locations in 2022.
Kate Eales, head of regional agency at Strutt & Parker, added: ‘Beyond London, we have seen every part of the UK outperform in terms of transactions in 2021, with coastal villages and the Cotswolds emerging as popular hotspots.
‘The £500k to £700k price range continues to move fast and properties in this bracket are the most coveted.
“We anticipate this trend to continue, and expect properties in appealing country villages with great connections and amenities that will show the greatest growth in 2022.
“Going into next year, less-traditional places in the likes Of Norfolk and Herefordshire could prove to be big winners as buyers feel more secure being farther from London.
Also, Strutts predicted that prime Central London properties would increase in value even further than an average house in 2022.
The report also stated that homes in Mayfair or Chelsea may grow between 5 and 10% despite being severely affected by the pandemic. This is despite the fact that these areas were badly hit as many people left cities to seek refuge and foreign buyers couldn’t come to the UK.
It said homes in these areas had increased in value by 1.2 per cent in the last year, the first time growth had surpassed 1 per cent since 2014 – though they remained 20 per cent down compared to that peak.
Liverpool and Wirral were two of the most affected regions by the largest price increases.
North West emerges as the pandemic champion
Knight Frank also conducted separate research and found the best areas where homes saw their total values increase during the pandemic.
Three of the largest growths over this period occurred in North West England. Rossendale, Lancashire’s biggest increase was 24.2 percent. Merseyside The Wirral and Liverpool saw 21.6 percent increases.
The top of the list by total stock value is still headed up by Westminster, but the value dived nearly £20billion between March 2020 and July 2021.
Richmond-Upon-Thames jumped to the eighth position, and Cornwall displaced Ealing at number ten as investors abandoned Ealing in favor of locations further afield.
Capital exodus? Ealing fell out of the most valuable housing stock rankings in 2021 for Leeds. Cornwall rose at the expense Richmond-Upon-Thames.
Knight Frank stated that this is because there were many flats in the region and less international buyers could travel to the UK.
This was among three authorities in England or Wales to see the property’s worth fall during the same period as Lambeth, -2.2 percent, and Wandsworth, -1.1% in South London.
Knight Frank predicted that “fewer” parts of the country will experience double-digit increases in home prices by next year.
James Cleland of Knight Frank’s Country Business said that anyone interested in selling their property in the early 2022 period would be well advised.
According to him, he said that there has been a noticeable increase in owners calling us to list their properties next spring.
“Shrewd sellers know that January is the most popular time to list their property because there are many buyers.
