Experts from the team of national estate agent Jackson-Stops have published their thoughts on the next year in the residential property market.
They expect house prices to increase by 3% in 2022, with this figure rising to 5% in higher-value country markets. This prediction is based on the assumption that interest rates rise marginally, and Stamp Duty Land Tax remains at the same rate. The effects of the pandemic on the housing market will continue to be an underlying factor throughout 2022, with country homes set to be in high demand and short chains likely to occur across the regions that house hunters and renters alike flocked to in 2021.
Over half (58%) of Jackson-Stops’ branches predict chains will become shorter in 2022, due to a higher volume of cash buyers in circulation and an influx of purchasers returning to the sales market from rental. This will be particularly prominent in the South West of England; the latest analysis of Jackson-Stops’ nationwide sales data reveals there are currently 23 buyers chasing every newly listed property here.
Whilst demand will continue to outstrip supply in Q1 2022, fresh sellers are set to list their homes later in the year, levelling out the stark imbalance between supply and demand which dominated the 2021 housing market.
Nick Leeming, chairman of Jackson-Stops, commented: “Lack of supply governed the 2021 housing market, with our latest data revealing that nationally there are currently 19 buyers for every newly listed home. These strong market conditions caused some sellers to delay listing their property for sale until they felt confident that they would find a suitable next home. An increase in new listings, fuelled by homeowners realising the extent to which their properties have risen in value over the last two years, will convince these previously cautious vendors that there are viable onward properties. We should therefore see a steady flow of new stock coming to market by the second half of the year.
“We anticipate only minor upward movement in interest rates as inflationary pressures increase but this will do little to dampen transaction volumes which are set to remain stable.
“Over half of our network expect that the average property chain will be shorter next year. This will be particularly prevalent in the South West, with chains shrinking to as few as two links for many sales in the most saturated markets, such as Devon. Shorter chains bring more certainty to the housing market which in turn will boost buyer and vendor confidence.”
New homes with strong eco credentials will continue to be sought-after, as buyers become far more conscious of their carbon footprint, and in turn look to benefit from long-term low energy costs. Furthermore, spacious living areas, with separate homeworking spaces and gardens will be in high demand. Buyers will be varied throughout the year across the new homes market, with this diversity peaking in the East of England with strong interest registered from young couples, retirees and families alike.
Copper Beech, an exclusive, three-acre development of six, newly built new homes in Hollesley, near the heritage Suffolk Coast.
Sarah Walsh, head of new homes at Jackson-Stops’ Ipswich branch, commented: “An increasing number of tenants now have pets following lockdowns, we’re now seeing this translate into house-hunters prioritising outdoor space which goes beyond a balcony when searching for a new home. We’re also expecting the market to be extremely varied and have strong buyer demand next year, we have had everyone from downsizers to upsizers, retirees to young couples and those moving from abroad with family registering their interest to buy. Every single buyer has been completely different, and even at developments with a fairly consistent style of product, the buyers don’t follow a particular trend in where they’re coming from or their motivations to move.
“There is a clear desire from house-hunters for homes with energy-efficient appliances, with a quarter of buyers now referencing green credentials in their property search. This in turn is becoming a key element incorporated in new homes, which I believe will only gain greater significance as we move forward through 2022 and beyond.”
A reassessment of property requirements will continue to fuel the country homes market throughout 2022, with prices set to rise by 5% across higher value price bands. Those homeworkers who remain unaffected by the reopening of their offices will now have the confidence to make a permanent move to a more rural location. These factors, coupled with a desire for more space, will ensure the rural homes renaissance continues throughout 2022.
Flexible living spaces will be key next year, with house-hunters chasing properties with ancillary buildings rather than multiple bedrooms. These outbuildings will be in high demand as buyers seek to convert the space into work areas, gyms, hobby rooms or a source of additional income. Green credentials will also be at the forefront of homeowners’ minds.
Nearly every Jackson-Stops branch (91%), from the North West through to the West Country, agrees that home offices and fast broadband connectivity will continue to be at the top of house-hunters’ wish lists next year, with many noting that buyers want these working facilities to be located outside the main house in outbuildings or a garden office.
Jonathan Weeks, director of Jackson-Stops’ Norwich branch, commented: “With the work-from-home trend here to stay, house-hunters no longer have the same ties to large cities. The countryside continues to offer excellent value and a lifestyle that many have wanted but had been unable to enjoy whilst previously chained to their city-based desks.”
Meanwhile, a renewed love of British boltholes, coupled with ongoing uncertainty around international travel restrictions, will support transaction volumes in the second homes market.
Ben Standen, director at Jackson-Stops’ Truro branch, commented: “Covid concerns and extra bureaucracy in terms of international travel will keep the UK’s hotspots busy during 2022. Many of our second home buyers are seeking escapism - being surrounded by greenery, sea air and coastal views can make a really positive impact on wellbeing and can encourage a happier and healthier lifestyle.”
Harry Buchanan, director of Jackson-Stops’ Pimlico & Westminster branch, commented: “We are expecting the 2022 market to be extremely busy across London. Buyers will be attracted back to the quintessential British character that is so prominent across the Capital’s prime housing stock. This, coupled with competitive mortgage rates will put upward pressure on demand. Boomerang buyers will continue to feature throughout the year. Many who have purchased a home in the country in the last 18 months will now be on the hunt for a complementary pied-à-terre which they can use for one or two nights a week.”