Our monthly update on the UK housing market – covering sold and asking prices, current market sentiment as well as the property outlook for the year ahead.
The latest UK House Price Index reports that prices increased by 10.8% in the year to December 2021. On a non-seasonally adjusted basis, this reflects a rise of 0.8% between November and December – exactly the same monthly increase witnessed in 2020.
Just like the previous month, house price growth was strongest in Wales (up by 13% over the year as a whole). London continues to lag behind, where prices rose by just 5.5%.
Reflecting trends seen throughout the year, the Bank of England’s Summary of Business Conditions notes strong demand for housing and a shortage of new properties coming to market. It’s all about supply and demand…
This imbalance has underpinned price growth but hampered sales. Indeed, the number of residential property transactions was 20% lower in December 2021 than a year ago.
Nonetheless, mortgage approvals (a useful indicator of future lending) increased from 67,000 in November to 71,000 in December – reflecting a busy start to 2022.
After the busiest ever start to a new year, February 2022 continues January’s strong start. Asking prices hit a record high of £348,804 in February, rising by over £7,785 (2.3%) from the previous month.
This is the largest monthly jump recorded by Rightmove in over twenty years of reporting. It also means that average asking prices have risen by nearly £40,000 since the pandemic began in January 2020.
As the final UK coronavirus restrictions were lifted at the end of February, London witnessed a massive rise in new buyer enquiries. Queries were up by 24%, the largest increase of any region. Could this herald the return to high growth for the capital?
In a market still suffering from a lack of stock, buyer competition remains incredibly stiff. There are signs of supply pressures starting to ease however, with the number of new homes listed for sale up by 11% (compared with the same period last year). This suggests April will be another busy month for both buyers and sellers…
January’s RICS Residential Market Survey points to new buyer enquiries gaining momentum. Respondents predict widespread growth both in terms of sales and house prices over the coming year.
Indeed, a net balance of +16% of respondents cited an increase in new enquiries during January. 24% of survey participants further envisage sales volumes rising over the year to come (an increase on +16% the previous month). This boost is anticipated across all UK regions and counties.
Whilst the measure of new instructions remains in negative territory (-8%), this is the least negative reading since April 2021. Market appraisals (when an agent values a property to provide a possible guide price) came in at +3% though – the first time this metric has gone above zero since June 2021.
Reflecting this slight increase in activity, sales volumes have remained relatively steady. In a market picking-up speed however, the average time to finalise a sale has dropped to just 16 weeks.
In their latest market outlook report, Zoopla identify a modest increase in the supply of new homes (with three and four bedroom homes listed for sale now 10% higher than a year ago). They predict improved levels of choice should, in turn, encourage more people to put their home on the market.
Greater choice isn’t likely to result in lower prices though, as the imbalance between supply and demand is set to continue throughout 2022.
Despite this, Zoopla predict price rises will ease over the coming year. This is largely due to wider economic conditions and uncertainty regarding global events, leading to higher mortgage rates and increased costs of living.
As such, values are expected to grow by 3.5% by the end of the year.
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
We specialise in helping you get more for your property. Quicker, easier and with less stress.
You can call us any time on 0333 016 5458 where we can provide help, guidance and support.
Instant valuation – get a free 32-page instant valuation report here
Video appointment – book a free, no-obligation 30-minute advice meeting with one of our experts here
Ready to instruct us? – locate and sign your agreement here
