The housing market has been on a roller-coaster ride over the last few years. There have been times when house prices have sky rocketed and times when they’ve taken a steep dive. But home prices are predicted to continue growing over the next four years according to the most recent estimates by the Office for Budget Responsibility (OBR). So, will 2022 be a good time to buy?
Why are house prices skyrocketing?
Well, according to the latest numbers from Nationwide Building Society, that’s an increase of 9.7% in just a year. Experts including estate agents in Clapham say due to the cost of living problem, growth fell to +0.3 per cent, the lowest increase since June 2021. Which begs the question: Why are house prices skyrocketing? The average British house price has rocketed to a new high of £276,759 since the warning came out in May 2020. There is also a growth of 9.7% in a year, which is quite impressive. Experts including estate agents in Clapham think it is because of the cost of living problem. Until at least June 2021 growth fell to 0.3 percent, which is the lowest increase since then.
Since Covid-19 there are several causes for property values increase including
– High demand over time
– Short of supply in houses in the market
– People desiring more space to live
– Mortgage prices hitting low
– Stamp Duty Holiday (which ended in October 2021)
House prices soared in February, with the Nationwide Building Society reporting a rise of three percent for the year – almost double the previous year’s 1.9 increase. Experts including estate agents in Battersea seem to agree that this was due to the end of the furlough plan and the stamp duty holiday, and its effect on the current cost of living crisis is yet to be known. According to the latest HMRC numbers, home sales totalled 96,290 in November. The statistic is down 16.4% from 24.3 percent in October 2021.
Is it a good time to buy a house?
The recent growth in house prices has meant that the cost of buying a home is now more expensive than it was a year ago. Some homeowners are taking advantage of lower mortgage rates and the stamp duty holiday to make some additional purchases. This is a good time to think about buying a home if you want to move soon. However, there are also obstacles for first-time buyers which you should be aware of. In many cases, competition for properties has grown much more fierce than it was a year ago because qualified buyers are now competing with cash buyers who can purchase in cash. House prices continue to rise despite the Bank of England’s best efforts in attempting to cool the housing market down over the past nine years since they started cutting interest rates in 2008. As a result of multiple offers and competition moving higher, there are more and more properties settling at or above the asking price now than there were before. A combination of price rises compared to wages as well as difficulties with getting a mortgage could put off potential first-time homebuyers, so ensure that you consider all possibilities before you buy a property right now.
Will house prices fall in 2022?
House prices could decrease based on the following factors
– With the pandemic not nearing the end, restrictions are unavoidable
– Living in a cost-of-living crisis with inflation increasing which is making the price of products and services more expensive than a year ago also has an influence on the housing market.
– Increase prices lead to defaulting mortgages which forces people to sell homes. This will increase supply and in turn, lower prices..
– Expensive mortgage after a historic low will lead to a decrease in demand.
However, house prices have risen at a higher rate than wages in recent years. This makes the housing market increasingly expensive.