Gazing into the property crystal ball
It feels like 2021 passed by fast, doesn’t it? And yet so much has happened. Well, we did start the year off with the US capitol being attacked by Trump supporters, so we knew that we were in for a wild year from the start.
Although not as dramatic as an attack on the capitol, the UK property market has been through a lot this year, too. With 2022 just around the corner, everybody seems to be taking their best guess at what will happen next year.
But first, let’s take a quick recap of this year:
Busy, busy: The number of transactions in 2021 have already exceeded 2020 transactions, with time still left in the year. We’re on track to meet pre-GFC 2007 levels in terms of transactions.
Ambitious: As of September 2021, there has been an annual property price rise of 11.8%, bringing the average property price to GBP 269,945.
Call of Stamp Duty: The long-extended stamp duty holiday ended in September. Many expected this to be the start of a cooling market… but maybe not. After the end of the holiday in September, the number of transactions halved in October, but prices still climbed 0.7% according to Nationwide. In November, we were already back to double-digit annual growth.
2021 has been a big year for UK property. But looking into the crystal ball, what can we expect in 2022?
Well, 2+0+2+2 is 6, and 6 is the number of domestic harmony and happiness, so that means…
Yeah, you’re right. The future is a mystery to us, and always will be.
But we can at least review with what we do know:
Omicron: There have been new detections of the Omicron variant across the UK. There is no ideal time for a new variant to appear, but with the holidays ahead of us, the UK is not getting a break. Regardless of how successful the government is in containing this variant, it will have an impact on the property market.
Rates up: Mortgages across the UK are expected to get more expensive in Q1 2022 and on, although this policymaker has called to review Omicron data before taking action. If rates do go up, prices should cool (in theory) as affordability decreases. But this could also be driving more transactions now as people try to lock in fixed-rate mortgages before the hikes.
Oh, BN(O): In 2021, 89,200 BN(O) passport holders applied to live and work in the UK. There are almost 2.9 million with the BN(O) passport and another 2.5 million eligible family dependents, so we can expect Hongkongers to continue emigrating to the UK in 2022.
The property market has been unexpectedly buoyant in 2021, but past performance is not always an indication of future results. If we can learn anything from looking at the past, it’s that we’ll probably have another eventful year in 2022!