Lack of supply has dominated the housing market over the past 12 months with new data revealing that nationally there are currently 19 buyers for every newly listed home.
The widening supply-demand imbalance continues to place upward pressure on house prices, although there are signs that growth may slow as we head into 2022.
Average UK property values are expected to increase by 3-5% next year, according to Jackson-Stops, which supplied the data.
The company projects that property prices will increase by 3% in 2022, with this figure rising to 5% in higher value country markets.
This prediction is based on the assumption that interest rates rise marginally, and stamp duty remains at the same rate. The effects of the pandemic on the housing market will continue to be an underlying factor throughout 2022, with country homes set to be in high demand and short chains likely to occur across the regions that house hunters and renters alike flocked to in 2021.
More than half – 58% – of Jackson-Stops’ branches predict chains will become shorter in 2022, due to a higher volume of cash buyers in circulation and an influx of purchasers returning to the sales market from rental. This will be particularly prominent in the South West of England.
The latest analysis of Jackson-Stops’ nationwide sales data reveals there are currently 23 buyers chasing every newly listed property in the South West of the country.
Whilst demand will continue to outstrip supply in Q1 2022, fresh sellers are set to list their homes later in the year, levelling out the stark imbalance between supply and demand which dominated the 2021 housing market, according to Nick Leeming, chairman of Jackson-Stops.
He said: “Strong market conditions caused some sellers to delay listing their property for sale until they felt confident that they would find a suitable next home. An increase in new listings, fueled by homeowners realising the extent to which their properties have risen in value over the last two years, will convince these previously cautious vendors that there are viable onward properties. We should therefore see a steady flow of new stock coming to market by the second half of the year.
“We anticipate only minor upward movement in interest rates as inflationary pressures increase but this will do little to dampen transaction volumes which are set to remain stable.
“Over half of our network expect that the average property chain will be shorter next year. This will be particularly prevalent in the South West, with chains shrinking to as few as two links for many sales in the most saturated markets, such as Devon. Shorter chains bring more certainty to the housing market which in turn will boost buyer and vendor confidence.”
Leeming believes that a reassessment of property requirements will continue to fuel the country homes market throughout 2022, with prices set to rise by 5% across higher value price bands.
He added:“Complex and ongoing changes to the nation’s working patterns and lifestyle aspirations will continue to fuel the country homes market in 2022. Buying a home is a long-term commitment and with lockdowns still fresh in people’s minds, house hunters are looking for properties which are more flexible, spacious and rural than where they lived pre-pandemic.
“Nearly a third [30%] of Jackson-Stops branches reported an increase in buyers requesting homes with easy access to open countryside with scenic walking routes.
“There is still a large number of people who lost out on buying their countryside home this year due to strong competition in the market. Many of these house hunters are now in rented homes and are keen to buy a permanent base in the areas they have tried and tested over the last 12 months.”
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