What next for the property market in 2022?

publication date: Apr 14, 2022
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author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

What next for the property market in 2022? 

 

Why property price averages don't help those buying and selling a home

 

The forecasts for this year are that we will have a strong start to the property market - as we have seen to date - but demand will die down a bit, supply will rise and as a result, property price rises are expected to reduce. This doesn’t mean house prices will fall, but the rate they are rising will.

To understand what the market holds in store for the next few months, two useful indices to look at are the GfK Consumer Confidence Index and the OnTheMarket Sentiment Survey.

UK Consumer Confidence Measures – March 2022
Currently, with the cost of living crisis hitting, this has clearly shaken consumer confidence, however, it doesn’t appear, as yet, to be impacting on buyers and sellers bearing in mind the data above. However, it’s likely to take its toll over the coming months and this could help reduce property prices for the rest of the year.

According to Joe Staton, Client Strategy Director GfK, “Fear about the impact of price rises from food to fuel and utilities, increased taxation and interest rate hikes has created a perfect storm of worries that has shaken consumer confidence. At -26, this is the lowest headline score since January 2021, one of the worst points in the Covid crisis.”

He also explains that this is likely to reduce consumer spending and ‘slow the wheels of the UK economy’.

Source: GfK

 

Download Kate Faulkner's comprehensive property price report for April 2022 here

 

Is general consumer confidence impacting on the property market?

According to OnTheMarket, although general consumer confidence in the economy and their own finances may be low, this isn’t impacting on the market.

Currently, both buyer and seller sentiment is improving with:

 

  • 75% of active buyers in the UK confident they would purchase a property within the next 3 months
  • 82% of sellers in the UK were confident they would sell their property within the next 3 months
  • 61% of properties were Sold Subject to Contract (SSTC) within 30 days of first being advertised for sale, compared with 43% in February 2021
  • Positive buyer and seller sentiment remains as highly motivated buyers compete for limited stock

 

And this confidence is leading to properties being sold almost at twice the speed they were back in February 21, taking just 36 days for sellers to secure a property.

 

 

Based on the current market what’s the best advice for buyers and sellers this month?

It’s clear the market is still pretty hot just now. For those that need to move, it’s going to be a tough market to do so and whether you are a buyer or seller, you will have to be incredibly well prepared and willing to have a stop gap to live in to wait for your next home.

Whether you are buying or selling, two things are incredibly important to get organised prior to buying/selling:

  1. Make sure you have checked your finances and secured a mortgage agreement in principle. Don’t make an offer based on what you can borrow via a simple online mortgage calculator.  
  2. If selling, instruct your legal company on the day of market - or even better prepare your legals prior to putting your property up for sale.
  3. If buying, take time to choose a quality legal company that understands your specific needs, for example, buying a new build, a Listed building and/or leasehold property. Know the company you are going to work with before you make an offer as you will need to give their details to the agent if your offer is accepted.

 

In addition:

  • If selling - be prepared for offers to come quickly - as long as your property is priced fairly. Make sure you don’t put your home on the market until you are sure the type of property you are looking at is available and in your budget.

  • If buying - be aware you may be one of several people making an offer, so make sure you have finances at the ready and try not to ‘over offer’ to secure the property unless you are likely to be living there for a decade or more or are a cash buyer and not worried about the property’s price dropping in the future.

  • If investing - you will have to work hard to purchase a bargain as they are few and far between at the moment. This is though a good market to research. Which properties are getting competing bids on them? Which are going within days or weeks of going onto the market? This can give you an idea of good properties to buy at a discount that will sell well into the future.

 

Next step – find out if you are buying or selling in a hot or cold market, at postcode level?
If you are looking to buy or sell, this is a great first step to help you know what type of market you are operating in and how organised you need to be, as well as if you can make a cheeky offer or may have to offer over the asking price! 

For example, although Liverpool has one of the ‘hottest markets’ in the UK just now, TheAdvisory data shows that L1 in Liverpool is actually one of the coldest markets in England.

From PropCast’s perspective, the hot markets at postcode level don’t necessarily track the overall increases and decreases seen even at town and city levels, with Walsall, Liverpool and Dagenham having some of the busiest markets, and London and L1 Liverpool having some of the slower ones.

TheAdvisory track current market conditions so buyers and sellers can gain an independent view of how easy it would be to buy and sell their home in their area. This makes it easier for good agents that are honest about market conditions to value and manage expectations. For example, in WS2 (Walsall) 95% of the properties on the market are under offer and EC2 in London is one of the worst performers according to this index, showing that ‘average property prices’ can mislead buyers and sellers.

Source: TheAdvisory

 

To find out what’s happening in your postcode visit the House Selling Weather Forecast here.

 

For more articles on Kate Faulkner's April 2022 report, click on the headings below:

 

 


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