On the one hand, predictions sometimes come true, and on the other side, they don’t. For the year 2021, the property market forecast was bleak, but see what happened! There was a flurry of activity, and it’s still going on.
Looking ahead to 2022 and the various factors that may affect the housing market, the prediction is that it will stay constant, if not slightly higher than in 2021. Property professionals, particularly estate agents in Wellington, are looking forward to this.
We take a look at a few of the issues that could affect the home market.
Extra space
People’s priorities in terms of where they should stay shifted as a result of the outbreak. Because people were confined to their homes and forced to work online as a result of the lockdowns, more spacious residences became fashionable, with extra rooms for office space and outdoor space, whether for a garden or a place to relax.
As a result, many people have relocated to the suburbs and rural areas from congested city areas. Since the outbreak of the extremely contagious Covid-19 virus, people have been more afraid of confined places such as apartment complexes.
As a result, the demand for larger, self-contained dwellings began to rise. Even if the lockdowns are over and some people have returned to work, the healthier environment of separate and larger apartments remains tempting.
As a result, there is more optimism in the home market. When there isn’t enough supply to meet demand, both the demand and the price rise. This is analogous to the housing market.
Demand far outnumbers supply, resulting in a stampede for real estate and, as a result, a price increase. If you are looking to buy a property in Wellington get an accurate property valuation in Wellington with the help of experts for better planning.
Affordability
Unexpected savings: Due to the lockdowns, which necessitated the closure of so many institutions, spending on non-essential items such as random shopping, entertainment, eating out, and vacations was restricted.
This resulted in some unanticipated savings, which came in handy for some people looking to purchase their first house.
Ratios of price-to-earnings and repayment-to-earnings: A considerable portion of the employee’s salary was guaranteed under the furlough scheme. As a result, affordability was attained while taking into account the repayment/income ratio.
The government’s mortgage plan, which allows buyers to borrow up to 95% of the property’s value, has helped potential buyers.
Other low-interest mortgage offers have appeared, making it easier for buyers to take advantage of them and make the required deposit payment.
Professional investors will look for changes in “emerging areas,” where demand is likely to rise over time. Simultaneously, they will search for moderately priced properties in similar places. As a result, their return on investment will be assured.
The immunisation campaign was a success, and as a result, some international travel restrictions have been eased.
Foreign investors have long been lured to the property market in the United Kingdom, and this tendency is projected to continue for the rest of this year and into 2022.
Inflation in prices
With the exception of London, which has remained relatively stable, house price inflation has been spreading across the United Kingdom.
Due to higher pricing levels, the impact of the SDLT holiday was not as obvious in London as it was in the rest of the country.
The London property market, on the other hand, appears to be on the mend, with a return to normalcy in sight. The real estate market will benefit from this.
There is likely to be a reduction in property transactions when the Stamp Duty Land Tax holiday fades away and expires on October 1, 2021.
Finance
Monthly wages are projected to decrease after the furlough programme concludes at the end of September 2021. Furthermore, unemployment is likely to rise until the economy stabilises. Property purchases will be affected as a result of this.
While low-interest mortgages are appealing to buyers in and of itself, keep in mind that the lower the mortgage interest, the higher the home price. As a result, low-cost financing plans may lead to exorbitant home prices, scaring away potential purchasers.
Policies
With the restriction on the free movement of persons between the UK and the EEA (European Economic Area), demand for properties in those areas is projected to decline.
It is impossible to offer a definitive prognosis given the above benefits and drawbacks affecting the UK home market. The real estate industry, on the other hand, appears to be thriving.
So far, the “bricks and mortar” investment has proven to be resilient in the face of all storms, and this pattern appears to be continuing. Only time will tell, and we’re looking forward to seeing what the housing market has in store for us in 2022.