The United Kingdom is currently experiencing a housing price boom. In May, prices increased by 10.9 percent year on year, thanks to the stamp duty holiday, lifestyle changes, and low lending rates.
While experts including estate agents in Stafford are optimistic that this upward trend will continue into 2021, what does this suggest for 2022? Let’s take a look at what will happen to home prices in the coming year.
What is the state of the housing market in 2021?
We need to know where we’ve been in order to forecast where we’re going. Thus, let’s take a look at what’s been going on with house prices in 2021 so far. The prolongation of the stamp duty holiday has had the biggest influence on the housing market this year. It was supposed to terminate in March 2021, but it was extended until the end of June, after which it tapered off and standard rates are to resume at the end of September. The property prices also rose due to the high demand and everyone wanted to know “how much is my property worth?”
As a result, the market has been saturated with prospective purchasers looking to secure a new house before the tax cut expires in the coming months. The Bank of England has also maintained interest rates low in order to help borrowers during the Covid-19 pandemic. With the buyers increasing in the market, homeowners everywhere opted for property valuation and even property valuation Stafford was on a rise.
While rates are beginning to rise again, they are still significantly lower than pre-pandemic levels. We are now experiencing increased demand for residences, but no new properties are being added to the market. Prices rise when there is more demand than supply. That is exactly what happened to the property market in the United Kingdom in 2021.
Will home prices continue to rise in 2022?
The question on everyone’s mind is whether house prices will continue to climb at the current rate or whether the market will taper down. There are only mixed forecasts but the good news is that no one expects a significant reduction in demand. While the end of the stamp duty holiday is likely to bring down house prices, there are still several reasons supporting property values. Demand continues to outpace supply. After the pandemic, customers are still looking to make lifestyle changes. People are looking for something different from their home since they spend more time at home and work from their computers.
As the furlough programme draws to an end, there is concern that unemployment may soar. However, analysts are optimistic that a strong recovery in the third and fourth quarters of 2021 will cushion the damage. As a result, Capital Economics predicts that annual house price inflation will average 3% until the end of 2024. Meanwhile, Savills predicts that prices would rise by 5% in each of the next five years until 2025 across the UK. But in reality, only time can tell how the property market will turn out in the coming months.
Is it a good idea to buy now or not?
If you’re thinking about moving, you might be debating whether you should do it this year or wait until prices drop. That is a difficult question to answer. When it comes to purchasing and selling a property, keeping track of shifting house prices is essential. However, a lot will rely on your specific needs and financial situation.
If the house you want is currently available and within your budget, it might be worth pursuing. Because interest rates are now low, there are some fantastic mortgage bargains to be had provided you have a good deposit.
And, thanks to the government’s mortgage guarantee programme, solutions for borrowers with low deposits are once again becoming available. There are no guarantees, even if you read every forecast available. House prices are expected to level out slightly in the near future, according to the current projection. Between now and 2022, though, anything can happen. As a result, you must decide whether you are willing to wait for improvements that may or may not occur.
