After an extraordinary year for the property market which has seen record growth fuelled by cheap mortgages, the stamp duty holiday and pandemic-effect lifestyle moves, there are some signs of the housing market softening heading towards Christmas. The Propertymark Housing Report indicates that the number of sales achieving over the asking price has dropped from 37% to 27%, with the number of properties available for sale at 23 per branch on average, that’s the lowest on record for the month of September.
Yet despite supply constraints, the slew of property market predictions for the coming year released around now from portals, agents and pundits are overwhelmingly positive. Forecasts from Zoopla indicate that prices will rise by +3% in 2022, with an imbalance of supply and demand continuing to support price growth. They believe the impact of the pandemic on homebuying decisions has further to run, supported by the scale of financial gains homeowners have seen in the value of their properties since 2020. Mortgage rates are likely to increase modestly, but stress-testing by lenders has already ensured borrowers can afford rates of 7% – significantly higher than where the mortgage market is heading.
Hamptons are expecting average price rises of +3.5% and say the desire for more space and the flexibility to work from home will continue to stimulate the market, with a second wave of lockdown-induced demand from those who have been unable to move this year.
So, what does this really mean? Winning instructions is going to be key, particularly in January and Q1, so no change there then. Home movers are being driven by new post-pandemic priorities that will continue to evolve; winning market share may depend on how well these can be identified and satisfied by agents. Economic conditions are shifting too, with the threat of interest rate rises looming. There have only been two base rate rises in the last decade, so that’s a whole new dynamic for some homeowners to understand and react to.
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