If you’re thinking of buying a home anytime soon, one of the biggest questions you may be asking is, ‘Will house prices go down in 2022?’
In this article, we’ll look at recent events and trends in the housing market and the factors that have contributed to the current situation with house prices. We’ll also take a look at predictions about whether or not house prices will be going down in the near future.
What happened to house prices last year?
Firstly, it’s important to understand what has been happening with house prices up to now and why.
House prices rose considerably in 2021, with the Office for National Statistics (ONS) reporting a 10.9% increase from the previous year.
This rise is a result of multiple factors, including the impact of COVID-19 on the housing market. At the start of the pandemic, the housing market slowed as many people put their search for a new home on hold. However, once restrictions began to ease, there was an increased demand for properties and a shortage of supply, which resulted in higher asking prices. Chinneck Shaw Estate Agents can help navigate this changing market and find the perfect home for you.
In addition to this, the UK government launched initiatives to help the market recover, such as the stamp duty holiday, which meant that buyers could make tax savings if they bought a property between summer 2020 and September 2021. This prompted many potential buyers to bring forward their property purchases in order to take advantage of the financial savings on offer.
How has this impacted conveyancing times?
Conveyancing is the legal process of buying a property, which begins after you have made an offer. It involves instructing a solicitor (conveyancer) to undertake all the necessary checks and paperwork involved to make your house purchase legal.
This typically takes around 12-16 weeks, however, due to the changes in the housing market and rapidly increasing number of house sales, conveyancing times have also been impacted, slowing down the home-buying process for many buyers.
Where is the housing market heading?
General uncertainty around the UK economy is contributing to uncertainty around the future of house prices.
With most UK households facing rising living costs, many may be put off making big financial decisions and long-term commitments, such as moving house or taking out a mortgage, for example. If fewer people are looking to buy property in 2022 and beyond, this could cause housing prices to plateau.
On the other hand, generally speaking, the majority of people choose to prioritise their housing payments over any other outgoings, due to the risk of homelessness if they don’t. So even with utilities and grocery bills rising, people tend to keep up with mortgage payments providing they continue to have an income, even if it means a need to be more frugal in other areas of their lives.
There is also a human element to consider as the limited supply and increased demand for property may make buyers wanting to get on the housing ladder feel desperate, and this sense of panic can spread and lead to further demand.
In summary, there’s a lot of uncertainty surrounding the housing market and what might happen to property prices in the near future. As a result, whether or not house prices will go down in 2022 very much remains to be seen.
