Your New Year Property Market Update
It is a new year, meaning new opportunities in the property market. If investing is on the top of your agenda this new year, you might be wondering where the emerging property markets are going to be and what trends we can expect to see.
With no new restrictions expected to be introduced, January 2022 should be a busy start to the year. Zoopla predicted that the market would begin to move back to pre-pandemic conditions. However, the demand and supply imbalance will remain, which will be a leading factor supporting price growth this year.
The post-Christmas bounce
Buyer demand and sales activity tend to slow down in the lead up to Christmas, but in the weeks following we expect to see the post-Christmas bounce. Last year, property searches more than doubled on Boxing Day. This seasonal bounce is a result of people revaluating their living conditions post-Christmas. Therefore, January is predicted to be a particularly active month for the property market. It will be carrying through the increasing levels of demand after the festive period.
House price inflation
In November, average UK house prices rose by 1% taking the annual growth to 7.1%. This is a decrease in the annual growth recorded in August, which was at 7.6%. Whilst the rate of growth is slowing down, the hive of activity throughout 2021 has put a huge upwards pressure on property prices. As a result, with London and Scotland being an exception, the average house price growth rate across the UK has been particularly high. For example, homes in Liverpool have recorded the highest rate of growth of any of the UK’s larger cities at 10.7%, followed by Manchester at 8.5%.
Another trend to note is the increased appeal of rural and coastal locations. Areas with ample outdoor space, greenery, beaches, or national parks have demonstrated heightened demand through the pandemic. As these also tend to be more affordable markets, this trend should continue into 2022.
The North-South divide is closing
Housing finance experts, TIC, released a list of the best and worst places to sell your home in the UK. Sheffield, Liverpool, Leeds and Manchester all made their way into the top ten. London, Chelmsford, Norwich, and Southampton all ranked at the bottom. This is further evidence of the closing North-South divide, as property markets in the North continue to dominate the leader boards.
Sheffield is a standout property market
Sheffield was sixth on a list of almost 40 cities, with figures showing the property market had grown in Sheffield by 10.7% between 2020 and 2021.
Not only this but Sheffield’s property price forecast is looking promising. A large estate agent in Sheffield, Spencer, predicted a price increase by 10% across the city. Therefore, not only is it easy to sell property, but investors will see much higher returns as well.
There has also been an increase in people moving from London to Sheffield, looking to downsize, which has added extra buyers to the market and increased competition. As a result, the Sheffield property market is looking extremely promising for 2022.
With high levels of demand heading into this new year, the market should remain active in January 2022. Coupled with a lower supply of housing stock, the average house prices will continue to rise. Zoopla recorded average house prices rising by £16,000 in the last 12 months. Consequently, buyers will need an even bigger deposit before stepping onto the ladder. This could tie many tenants into the rental market for longer, which is great news for buy-to-let investors.
We predict the market will return to more normal levels this year. Nevertheless, it will still be busy, but much less frantic than what we experienced in 2021. Of course, our predictions are dependent on how COVID-19 restrictions continue to impact the economy. However, the market has shown resilience throughout the last two years so we can be confident this will continue.
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