Housing market conditions continue to watched daily by all those with a vested interested in the area but there is no reason to panic yet. Inflation fears continue to grow which has resulted in the Bank of England shifting its stance with the hope, and belief, that the economy will remain resilient despite cutbacks in consumer spending. Evidence suggests that the residential and commercial sector will remain positive this year (RICS, 2022).
Key data – researched in March (generally based on February’s data)
- From January 2022 to February 2022, prices increased 1.7% month-on-month with prices around 20% higher than just before the start of the Covid-19 pandemic.
- Nationwide announced that the average house price exceeded £260,000 for the first time in February citing red-hot demand.
- Sales agreed in February were 31% above the 2017-19 average.
- The Bank of England, as expected, rose the interest rate to 0.75% and warned inflation will intensify beyond 8% (This is Money, 2022).
- Merthy Tydfill, and Blaenau Gwent in Wales saw annual growth of 21.2% and 18.3% respectively and Scotland’s Clackmannanshire reached annual growth of 18.3% outperforming of authorities in England.
- Rental growth started to slow across some parts of the country at the end of 2021, including the East of England and the South West – a potential indicator that rental growth has now peaked.
- The stock of homes for sale remains low and continues to keep prices high due to competition and limited choice.
Market analysis and predictions
- Borrowing could become more expensive as the year progresses although much will be dependent on the war in Ukraine.
- There continues to be competitive mortgage availability and although rates are not at their lowest, it is still low when compared with historical rates.
- Estate agents are still reporting high demand for property viewings although many are expecting a ‘cooling’ of the inflated prices driven by the stamp duty holiday and higher loan-to-value policies in 2021.
- Construction costs have and will continue to increase due to fuel increases and low availability of materials.
We recommend listening to the latest podcast from PropertyHub where industry experts discuss the economy and other property related matters.
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