After a record-breaking year last year, with 2021 leading to record levels of demand, sales agreed, portal traffic and mortgage enquiries, sellers will be eager to know what 2022 will bring.
In part, 2021’s market performance was fuelled by the stamp duty holiday – which offered tax savings for everyone from downsizers and second steppers to buy-to-let investors – but was also helped by favourable lending and borrowing conditions, and the lifestyle changes sought by many buyers and sellers as a result of Covid-19 and the lockdowns this led to.
But what could the first half of this year mean for the sales market? Will it be as buoyant? Will prices hold up? Will there be new trends in the market?
Here, we take a closer look.
Demand remaining strong
While there is expected to be something of a slowdown in demand this year compared to last, it doesn’t follow that demand will be falling off a cliff. Quite the opposite.
Rightmove, the UK’s biggest portal, recently revealed that it experienced another record year for activity over the festive period, despite fewer Covid restrictions this Christmas compared to 2020.
It claimed its visits over the Christmas period were its busiest ever, with what it calls ‘buyer demand’ up 23% compared to the same time a year earlier.
Rightmove also recorded its busiest ever Boxing Day for visits to its site and apps.
“Boxing Day traditionally signals the start of activity ramping up as people turn their attention from turkey and trimmings to their plans for 2022, and activity is set to increase further as January unfolds and people start to settle down into a routine after the December break,” Tim Bannister, Rightmove’s director of property data Tim Bannister, said.
“Despite the frenzied market activity we saw throughout 2021, we’ve recorded even higher levels of buyer demand in the period between Boxing Day and the New Year this year, driven by a sustained desire to get on and move.”
This strong demand is likely to feed into January and the first few months of the year, continuing to put sellers in a strong position in terms of negotiating asking prices and having plenty of eyes on their homes.
Prices continuing to rise
Despite more sellers coming to the market, demand is expected to continue to outstrip supply in the coming months, with prices continuing to rise as a result.
Most experts have forecast another strong year for the market, if not quite as busy and frenetic as last year.
There is certainly no evidence that the market will dip dramatically in the first half of 2022, and it seems far more likely that it will be business as usual, with sellers having a good pool of potential buyers to choose from.
Interest rates potentially rising
Demand could be affected somewhat if interest rates rise again, although any further increases are expected to be small and incremental.
In December, against expectations, the Bank of England decided to increase interest rates for the first time in over three years – from the record low of 0.1% to 0.25% - to tackle soaring inflation. With the cost-of-living crisis set to bite in April, due to tax rises and energy bill increases, the Bank may act again to increase interest rates – although this is far from guaranteed.
Generally speaking, interest rate rises negatively affect borrowers while helping savers, although the vast majority of buyers will be on a fixed-rate mortgage to begin with – and interest rates remain very low, historically speaking. This should help to keep demand high, while the threat of further rises could encourage buyers to act quicker with their home-buying plans, before any further base rate increase, to lock in favourable deals.
This, of course, would be to the benefit of sellers looking to sell their home quickly.
Lockdown trends remaining popular
During the lockdowns, work from home and garden space became much more important to buyers, and this has continued to be the case even as society has reopened.
With hybrid working set to remain popular even now the work from home guidance has been dropped again, home office space is likely to be a big draw for many buyers, while those having to self-isolate may appreciate garden space to walk around in.
City and town centres have bounced back in popularity as society has reopened, and this is expected to continue with further lockdowns seeming unlikely.
For more information about how we at Howland Jones can get your home sold, please get in touch with us today.
We will do all we can to help you get your home sold in the first half of 2022. Our offices are based in the village of Measham in the East Midlands, and we cover areas such as North West Leicestershire, South Derbyshire, Hinckley & Bosworth, North Warwickshire, Tamworth, Swadlincote and Ibstock.
You can find out all about us by getting in contact here.