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2022 Housing Market Predictions

Homemovers and housing professionals had a lot to contend with last year: the pandemic created a “race for space” as people searched for bigger homes, while the stamp duty holiday and record low interest rates fuelled soaring numbers of transactions. Will 2022 be as dramatic? We’ve asked the estate agency Strike to give us their take on what’s to come.

December 7, 2021

4 minute read

2022 Housing Market Predictions

Last year was a whirlwind in the property market — in fact, the last 18 months have really kept everyone on their toes. We’ve seen record high house prices, record low interest rates, and transaction numbers soaring and falling around the stamp duty holiday. What will happen in the 2022 housing market? We’ve asked Jonathan Magill, the UK Network director at Strike — the estate agent who will sell your home for free — to give us a sense of what to expect this year. 

Don’t expect demand to fall off a cliff edge

What goes up, must come down — or must it? The dizzying highs of 2021 led some to think that a housing market crash may be on the cards, but recent trends show that may not be the case. 

“Clearly the stamp duty holiday and ‘space race’ in 2021 created an unprecedented surge in demand in 2021, particularly around the stamp duty deadlines in March and September,” Magill explains. “However, as both of those deadlines passed we continue to see demand levels remain strong compared to recent years, so on that basis there still feels like there are high levels of demand to carry into 2022.” 

Changing priorities will still play a role

We’re all waiting to see what happens with Covid this year and the impact it will have on our lives, travel, work and so on. What about the impact on our home buying decisions?  Strike saw growing demand in rural areas and market towns throughout 2021 and, while it may have seemed at one point that people were ready to return to city living, Magill suspects the trend could stay towards bigger properties — and more green space. 

“We are also still yet to see the full impacts of the pandemic play out on home movers’ behaviour,” he explains. “If we see more structural shifts towards hybrid and home working then this is likely to translate into people continuing to move towards larger properties with outside space.”

Some buyers may be feeling the pinch

While activity looks good for the 2022 housing market so far, it’s important to be realistic that there might be other macro factors at play that could have an impact — especially on buyers. It seems clear that the record low interest rates we’ve been seeing may start creeping in the other direction. “The Bank of England has already increased the base rate at the end of last year,” he says. “However, it should be noted that this comes off the back of extremely low rates, so it is likely to take some time for this to really impact demand levels.”

While not all buyers will be deterred by slight increases, it can have a big impact on mortgage repayments for some — especially for those who are are already feeling the pinch in other areas. “On the gloomier side, with steeply rising energy prices and further Covid impacts, we may see people having to tighten their belts as we enter the new year,” Magill explains. 

Only time will tell, but buyers struggling to get on the market or who are on the cusp of upgrading to a bigger property may find it difficult in the face of other financial pressures and a rising cost of living. This may affect demand for entry-level properties — but with demand already being so high, we’ll have to wait and see if sellers feel the difference. 

The climb may continue — just without the peaks

So what will 2022 housing market bring? The market has managed to survive the end of the stamp duty holiday, not to mention the ups and downs of the pandemic so far, while still chugging steadily higher — and that looks like it’s here to stay. “Overall, I think the indicators are broadly towards a modest growth in prices in 2022 and a slight cooling in transaction levels from the unusual peaks seen in 2021,” Magill says. 

As he noted, rising cost of living and increased interest rates may change the landscape for some buyers —but the market is likely to stay strong through 2022, but perhaps less dramatic than we saw in 2021. 

How to sell your home — for free

Looking to make the most out of 2022? Strike can help you save thousands. If you’re looking to sell, you’ll want to find an estate agent that can deliver on your priorities —whether it’s securing the best sale price, selling quickly, or both. 

Strike does this and promises to sell your home for free.

Want to find out how you can save? Find out more about Strike, from their handy app, customer online hub and virtual viewings.

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