Daily Telegraph house prices story

ended 16. January 2022

A journalist at the Daily Telegraph is writing an article today for the paper tomorrow about the fact house prices have continued to climb as competition for homes on the market has reached unprecedented levels. She's looking for some comments about whether you think this can carry on throughout the year, or if you expect any big changes to recent trends in 2022. Deadline is 14:00 today.


9 responses from the Newspage community

House prices will continue to rise whilst ever we've got a chronic shortage of housing stock available. Successive governments have failed to build enough homes to keep up with demand. In addition, our population is growing & ageing, and we just haven't got the stock available to deal with that growth. Not to mention hundreds of 1000s of houses or second homes or dilapidated houses that could be brought back into use that aren't being brought back into service. On that basis, it's straightforward economics; market prices rise whenever demand is higher than supply, especially when we already know that supply isn't going to increase at the levels we need for the next five years as a minimum. However, because of inflation rising, the cost of living being squeezed utility bills on the up & potential tax rises in the offing along with interest rates looking set to increase all of this is has yet to feed into the property market. So, whilst prices will continue to rise for the first half of the year, it's likely that come summer, we should probably start to see them plateau, which is good news, in all honesty, for everyone.
According to Yazz, the only way is up, baby. She might well have been singing about rising from poverty and eviction in the 80’s, but the lyrics also ring true for current house prices. The continued shortage of stock means they are only going One Direction (sorry).
I think house prices will, at best, plateau this year, and quite possibly fall. Last year's double digit increases, artificially distorted by the stamp duty holiday, could well be the peak for prices in quite some time. This year we've got energy and food prices going through the roof, the National insurance hike in April and higher interest rates. Many small business owners will be paying off Bounce Back loans as well. All these factors are likely to affect demand significantly, particularly from first time buyers.
Supply of decent stock available on the market has become the biggest issue over the past couple of months. However, since returning from the Christmas and New Year break, we are experiencing high levels of valuations with good quality stock becoming available. As ever, properties with a respectable marketing price will sell quickly as demand continues to be high. It really is a seller's market and I see no signs of this abating through the coming months. Buyers do need to be in a strong position in the current market and that means either being sold subject to contract themselves or in rented and ready to go! Many vendors are also now considering breaking chains and moving to rented to be in the strongest of positions when onward purchasing. This in turn is also driving the strength in the lettings market.
2021 saw a significant rise in property prices and whilst I do not foresee a similar increase this year, property prices are still likely to go up whilst demand remains strong and supply is limited. The Bank of England base rate rise in December calmed the market a little and more increase are predicted this year, making mortgages more expensive. That, said we are still in a period of historically low mortgage rates even if we return to pre pandemic levels at some point in 2022.
Boring, that's my prediction for the house market in 2022. We won't see the same soaring demand, now the stamp duty tax cut has ended. We will see consolidation of higher prices with a modest increase, helped on by demand from investors and the relaxation of mortgage affordability rules.
One thing that will continue to push up prices is that lenders are making mire funds available to borrowers; they are allowing them to borrow more. This time last year a first time buyer earning £31,000 would struggle to borrow more than 4.5 times their salary. Today they can borrow 5.5 time their salary. A couple earning £25,000 each can now borrow 5.5 time their joint salary too. A year ago this would have been 4.5 times. Once lender is even allowing people in certain jobs to borrow 7 times their annual salary. With more money avilable to borrow buyers come to market with bigger budgets, but whihc little extra stock there is only one affect this will have on prices, up.
Although supply of new stock to market in January has risen compared to the last quarter of 2021, demand is still immense across most price points in the market. With an average of 15-20 buyers wishing to view every new property to market. One extreme case saw one of our partners in North Birmingham receive 95 viewing requests within 72 hours of placing a property to market. I cannot foresee a significant change to the continued upward trajectory that we are currently seeing all the while interest rates remain as low as they are and mortgage lenders are being as generous with lending as they are.
The Yorkshire market over the last two years, has been phenomenal. This will and is continuing throughout 2022 for several reasons - 1) international relocations (people moving back 'home' to Yorkshire, who have had enough of city living during Covid. 2) London and Home Counties moves as work from home, allows people to live further afield and a push for more outside space, combined with a better work/life balance. 3) a strong local market and a shortage of supply. 4) comparatively low interest rates and money remains cheap. 5) major company relocations such as Channel 4 to Leeds, BBC to Salford and Bank of England having an outpost in Leeds. 6) Harrogate remains one of the top places to live (according to Rightmove) and consistent media coverage about the county - the number of Yorkshire based television programmes currently is phenomenal. All the above factors will mean that prices will continue to accelerate. The north-south property divide has been turned on its head