The property market in the UK has been on a steady increase since January 2013 and the pandemic has done nothing to slow it down. According to the Office for National Statistics price index, the average house price in November 2021 was £271,000. An increase of £25,000 from the year before.
So why, when we are in a worldwide catastrophe, has the property market done so well? The demand for properties has almost seemed to defy gravity and shows no signs of slowing down. The increase in property transactions over the last 12 months has caused an actual shortage in properties available for sale.
Changes in the tax paid on stamp duty may have contributed somewhat to sellers increasing their asking price. A stamp duty holiday was introduced last July raising the cut off to £500,000 rather than the previous £250,000.00 making it more financially feasible to buy and sell.
Interest rates were at a record low, therefore, borrowing a larger amount was possible. All put together creates a perfect cocktail for the property market to thrive. In fact, there are now more people looking to buy than houses on the market which further feeds into house price increases.
The pandemic has given rise to home workers who need a dedicated working space and have now outgrown their homes as well as new pet owners seeking gardens and the chance to go on country walks.
More and more people now have the option to work from home, which cuts down on the expense of commuting. Meetings have generally moved online which has opened up many doors to the location options of where we live. Following Covid we are now thinking, living and spending very differently.
So, what does 2022 have in store for us? What goes up must come down? Perhaps not. Generally, the rule of thumb is that for every property market boom, follows a crash. According to real estate experts, this won’t be the case. Good news for anyone considering selling their property in 2022.
Even though the bank of England increased their rates in September 2021, it is still likely to take a while for it to rise to pre- Covid levels. People will likely take advantage of the lower interest rates and we predict that the property market will continue to prosper at a steady level because of this.