Buyers may have more choices and rising interest rates may help keep home prices in check in 2022.
UK Real Estate Market Expected to Normalize in 2022
After a wild and feverishly paced ride over the past 18 months, the real estate market in the United Kingdom is expected to normalize in 2022, according to Rightmove, a British real estate portal.
More Housing Supply Expected in 2022
Rightmove anticipates that more inventory may become available to buyers in 2022 due to a +19% uptick in homeowner requests for property valuations during December.
Another “normalizing” data point includes a return to market seasonality. As in Decembers past, the average listing price of a for-sale home is down -0.7% m/m this December.
“A return to a less frenetic market due to more choice…will suit many movers who have held back during the last 18 hectic months,” said Tim Bannister, Rightmove’s director of property data. “With a jump in the number of owners requesting valuations from agents with a view to marketing their homes, it looks like many of this group are now gearing up to make it a New Year resolution to move, so more buyer choice could now be (in) the cards.”
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Interest Rates Expected to Rise
Rightmove, as well as other industry experts, is expecting UK mortgage interest rates to rise in 2022. Such a rate hike, if it comes to fruition, could slow home price growth.
Bannister said, “A rise in interest rates is likely next year, and, while a rise is often regarded as unhelpful to the market, a slowing of the fast pace of sales, and associated pace of price rises, will help the return to more normality.” Bannister added, “Buyer demand and market momentum (will) remain strong going into 2022.”
Home Prices Expected to Rise
Rightmove’s data also suggests that home prices will increase +5% in 2022, not close to the +6.3% increase during 2021.
Marc von Grundherr, director of Benham and Reeves agency, said, “Next year, we believe the market will remain robust and that even the threat of an interest rate increase is unlikely to topple the positive price trends seen in 2021. Of course, the meteoric rates of growth seen this year are likely to slow.”
Thanks to MansionGlobal.
