Seasoned real estate experts, Thirlmere Deacon consider what’s ahead for the UK property market in 2022.
In 2021, the country’s property market has excelled considerably with £473 billion worth of property expected to be sold before 31st December 2021, £95 billion more than the value of sales in 2020*. What does this busy year mean for 2022? And is now a good time to buy?
Whilst homebuyers and prudent investors might experience a shortage of properties available and face competition in the market when looking for a place to buy, those who are able to secure a property for a fair price in the closing months of 2021 or early 2022 are set to enjoy robust price rises in the coming years – It’s an exciting time to buy property in the UK.
As the country has emerged from periods of uncertainty in the past, those who secured a property in a rising market have experienced the greatest return on their investment. Property price forecasts have remained consistent and unanimous in their prediction that price growth will be steady in 2022 and thereafter, with certain parts of the country expected to experience almost 30% price growth over the next 5 years.
Even with these impressive price growth predictions, what you buy and exactly where you buy remains the key to success when investing in property – certain cities and towns within each region will outshine others in the rate of capital appreciation they experience over the next 5 years.
Prime Central London, which includes areas such as Mayfair and Marylebone, are an example of a micro-market within a broader area that is set to do far better than its surroundings. The latest price growth forecast for London overall sits at just 12.4% by 2025. In comparison, the analysts** predict that Prime Central London will experience price growth of 21.6% in that same period, almost double.
In other parts of the country the North West region which includes Manchester and in Yorkshire & The Humber where you’ll find Hull, prices are predicted to rise by 28% over the next 5 years. Price growth continues to be strongest in those areas where property remains to be affordable, this was seen throughout 2021 where the cities with the highest price growth were Manchester, Liverpool and Sheffield.
Those who sit on the sidelines and wait for the ‘perfect’ moment to take action will often miss out.
Why the UK?
When comparing UK property to homes across the rest of the world there are some notable differences. In particular, the quality of housing in the UK stands out as some of the best in the world with regulations that ensure developers must meet certain standards, and works must be signed off by qualified professionals.
Furthermore, whilst prices in the UK might have risen considerably over the past 10 or 20 years when the cost of a property in the UK is compared to those across the rest of the world, they are still in fact reasonable. For example, the average price of a property in the UK is £254,624 which is far less than the average price of a property in Singapore, for example, which is currently £1,122,889***.
How secure is UK property?
The UK property market has continuously proven its resilience in the face of political and economic uncertainty for many years, and with the government supporting its recovery as and when needed, homebuyers and investors alike can find comfort in UK property that isn’t available with other asset classes.
With robust housing policies in place, the UK property market has foundations unlike other property markets across the world. There are key policies, brought in by the New Labour Government in 2008 and 2009 that intervene and ensure the UK property market is not significantly adversely affected. For this and many other reasons, UK property is an appealing prospect to investors across the globe.
Why invest now?
With property, investment time is very much of the essence. Those who sit on the sidelines and wait for the ‘perfect’ moment to take action will often miss out. That’s not to say investors should take unnecessary risks, but a calculated approach to investing can be incredibly fruitful.
Property investment is not a strategy known to trigger overnight success – those who place funds into property should expect to leave it there for 5 years, or longer, to see the greatest return on their investment. Very few investment options are as resilient and on a path to experience almost 30% growth in value by 2025.