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House price growth slows in 2022

Zoopla’s latest home price index claims that rising mortgage rates, rising living costs, and “headwinds” such as tax increases will slow the pace of real estate prices in 2022.

Online real estate portals predict that home price increases will be 3% by December 2022, but are now over 6%.

It said sellers’ “unrealistic” expectations about what their homes were worth could also undermine activity in the market.

Mortgage rates are likely to rise “moderately” in 2022, approaching 3% at the end of the year, but argue that rising mortgage rates will hurt sales volume more than prices. bottom.

Slowdown: According to Zoopla, real estate prices will slow down in 2022

According to Zoopla, existing borrowers may also be more “isolated” from higher mortgage rates than in the past.

Even if they went up, the real estate portal said competition between lenders remained fierce.

Over 80% of mortgages have fixed interest rates, most of which are for five years.

Stress tests have already confirmed that they can offer a mortgage rate of 7%, which is higher than the mortgage market is heading.

This year, real estate sales have reached record levels and appear to be set to exceed the 1.5 million reached in 2007.

Zoopla forecasts that by the end of 2021, there will be £ 473 billion worth of newly agreed sales. That’s £ 95 billion more than last year.

“There were no signs of a cliff edge in demand” among buyers, but added that market activity is on track to run at such an enthusiastic pace over the next few months.

Zoopla believes that there will be about 1.2 million real estate sales in 2022, 20% less than this year’s 1.5 million. This year’s market has been supported by cheap mortgage transactions, stamp duty holidays, and a surge in buyer demand for more space.

The shortage of homes for sale remains a serious problem, but housing demand has been 30 percent above the five-year average since summer, Zoopla said. Demand is expected to continue to run “strongly” next year.

Affordable: Home Price to Profit Rate for a Single Earner Nationwide

Affordable: Home Price to Profit Rate for a Single Earner Nationwide

“Housing shortages are expected to continue until 2022, supporting major home price inflation,” the real estate portal said.

House price growth is currently 6.6%, despite “significant regional disparities” from 2.3% in London to 10.4% in Wales.

According to Zoopla, above-average home prices are expected to continue to rise in the most affordable markets with the highest growth rates today.

According to data, in 2022, home price growth will be highest at 4% in North West England and the East Midlands and lowest at 2% in London.

Richard Donnell, Executive Director of Zoopla, said:

“The impact of the pandemic on the housing market needs to grow further, but at a less enthusiastic pace.

“We expect market momentum to outweigh the new headwinds of rising living costs and the risk of rising mortgage rates.

“The latest data show a turning point in home price growth, which is expected to slow rapidly with a 3% rise in UK average home prices by the end of 2022.”

After the first blockade last year, it was usually the wealthy homeowners of high-value homes who chose to move. But this year, according to Zoopla, Mortgage availability has improved and first-time buyers are back on the market.

As a result, Zoopla states: This has significantly slowed growth in the value of homes for which new sales have been agreed, indicating a slowdown in future price increases.

In London, the level of affordability has increased by 10% since 2016, but affordability is well above the long-term average. This will continue to limit potential price increases in London and the most valuable regions of southern England since 2022, Zupla said.

Real estate prices rose 10.6% to an average of £ 264,000, £ 25,000 higher than this time last year, according to official data from the National Bureau of Statistics last week.

Mortgage Surveillance: Mortgage rates have fallen, but regulations have added protection

Mortgage Surveillance: Mortgage rates have fallen, but regulations have added protection

Problem area: In the UK real estate market, demand continues to outpace supply

Problem area: In the UK real estate market, demand continues to outpace supply

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House price growth slows in 2022

Source link House price growth slows in 2022

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