House prices set to increase this New Year – Reallymoving House Price Forecast
The Reallymoving House Price Forecast has been published, and shows that house prices in the UK are set to increase this New Year.
Key points from forecast:
- House prices in England and Wales will rise by 1.3% in three months from November – January 2022
- Small monthly price falls in November and December will be wiped out by +2.5% increase in January
- Shortage of stock is countering negative impact of rising inflation and the threat of interest rate rises
- Annual growth will remain positive through to New Year, with +2.3% annual increase in January
The property market in England and Wales is on track to see an upturn in house prices in the New Year based on sales agreed in October, as a nationwide shortage of stock pushes forces buyers to compete to secure a home, according to the reallymoving House Price Forecast October 2021, released today.
Reallymoving captures the purchase price buyers have agreed to pay when they search for conveyancing quotes through the comparison site, typically 12 weeks before they complete, enabling it to provide a three- month house price forecast that historically has closely tracked the Land Registry’s Price Paid data, published retrospectively.
Prices will dip by -0.1% in November and -1.1% in December 2021 as a result of deals agreed between buyers and sellers in August and September, when the impact of the stamp duty holiday subsided, and buyer demand returned to more normal levels for the first time this year. Sellers may also have been motivated to price more competitively in order to attract a buyer and complete before Christmas. But this lull will be short-lived, with buyers and sellers agreeing deals at higher prices in October, which will result in a +2.5% increase in the New Year taking the average completed sale price to £342,836 in January 2022.
The shortage of stock as reported by agents has supported values as the market adjusted to the end of all stamp duty incentives, alongside reassurances from the Bank of England that rate rises, if and when they do begin, will be moderate and steady. The long period of double-digit year on year price increases we’ve seen over most of 2021 is over for now but annual growth will stay in positive territory for the rest of the year, with increases of +0.9% in November, +0.2% in December – followed by a strong +2.3% annual increase in January 2022.
Rob Houghton, CEO of reallymoving, comments:
“Transaction volumes are unsurprisingly down since the end of the stamp duty holiday but the outlook for the housing market in early 2022 is positive. The most intense phase of the post-pandemic boom has now subsided bringing about a brief autumn lull, but the fundamental supply and demand imbalance continues to support prices and, while the threat of interest rate rises will give some buyers pause for thought, thanks to stress-testing by lenders most homeowners will be able to absorb small rate rises over an extended period of time without too much trouble.
“House price inflation for First Time Buyers has been lower than for upsizers and downsizers, meaning First Time Buyer activity levels are reassuringly high at around 54% of all buyers – an encouraging sign of market health. An anticipated surge in new listings in the new year will drive activity, boost transaction levels and help existing sellers to complete chains.”
Kindly shared by Reallymoving
Main photo courtesy of Pixabay
