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Housing Market Outlook 2022

March, 2022

Housing Market Outlook for 2022

This article takes a look at what lies in store for the property market following an interesting webinar hosted by Rightmove with expert analysis from David Smith who has been Economics Editor for The Sunday Times for 30 years.

Current State of Play

Two years on from the start of the pandemic and the property market continues to see prices rising and demand outstripping supply, 2021 was an extraordinary year for prices no matter how you measure it and the total number of properties sold was the highest since 2007.

The main reasons were the record low interest rates, stamp duty holiday, desire of people to find extra space to accommodate home working and the Furlough scheme which reduced the risk of unemployment for so many. It is worth knowing that whilst the base rate was 0.1% and interest rates generally have been below 2% since the financial crisis of 2007, they had never been that low previously in the history of the Bank of England which dates back to 1694!

Surge in Inflation and Cost of Living – A Blip or Long Lasting

Recent events have seen the consumer confidence barometer as issued by GfK weaken however it is certainly not as low as it was at the start of the pandemic. Inflation is expected to hit around 7% by Spring this year and the issues in Ukraine affecting oil and gas prices will certainly add to that. The expectation though is more promising, and that the higher inflation shouldn’t last too long. Energy spikes tend to be short term in general and easing of supply chain issues will also assist.

Interest Rates

The Bank of England Monetary Committee decided to raise interest rates in December, February and again today to try and curb the rising inflation and this is almost certainly set to continue in the months ahead. Whilst some members wanted a more dramatic increase it is expected that a softly softly approach will be taken with rates rising to around 1 – 1.25% in 2022 and then 1.5 – 2% in 2023.

Can Economy and Jobs Continue to Grow Despite Ukraine

The monthly Gross Domestic Product (GDP) produced by The Office for National Statics had seen a gradual and consistent increase from 2008 to 2019 however a recent 20% drop has seen it slide back to pre-pandemic levels. National Insurance increases which come into effect in April this year, an increase in Corporation Tax from April 2023 and a 4-year freeze on Income Tax thresholds will see an annual tax hike of £40 billion once they are all implemented and whilst there is pressure to delay some of the changes that would appear unlikely albeit it would be surprising if there were any further tax increases this year.

With employment numbers rising and now higher than pre pandemic levels the overall view is that the economy will continue to grow in 2022 with a likely increase of between 3 and 4% predicted.

Housing Outlook

Early indicators from February and March show that valuation requests to estate agents are up 11% on historic levels for the same period and this figure has been replicated in the number of new properties coming to the market. A 2.3% increase in the monthly average asking price in February was the highest in 20 years of reporting and the 9.5% annual rate increase in asking prices in 2021 was the highest since 2014.

The average price growth forecast for the UK in 2022 is 5% but closer to home has the South-West expected to increase by 7%. This is likely to see the current activity levels continue before a slower end to the year returning the property market to some form of normality. The long-term view is that after 2022 there will be a slight drop in house prices before increases of 3% in 2024, 2025 and 2026.


As with anything statistical figures can and will change as the world forever changes and the unknowns are faced but this is an overview as we sit today. I always welcome comments and views so feel free to post yours.

If you have any specific property related questions then please message us, call 01452 260993 or email and we will be delighted to assist.

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