What Will the Property Market Look Like in 2022?

Sun 12 Dec 2021

Ian Woodhouse-Smith, Lettings Manager

As 2021 draws to a close, we’re looking at the predicted property trends for 2022. Zoopla has released their forecast for next year’s property market, and here’s what it means for homebuyers in Hampshire.

Will house prices continue to rise?

It is predicted that house prices will increase by 3 per cent over the course of the year, with a projected 1.2 million properties sold. This will be fewer property sales than in 2021 – expected to reach 1.5 million by the end of the month – where the post-lockdown stamp duty holiday caused a surge in transactions with people rushing to move before the holiday ended in September.

Demand for properties will continue to outstrip supply, fuelling the ongoing price inflation. Zoopla predicts that 22 per cent of households – over a fifth of those in the UK – plan to move home in the next 18 months. This is largely due to pandemic lifestyle changes that have made city living less desirable as working patterns change.

Housing demand is currently between 20 and 30 per cent higher than average, and this high demand is projected to continue into 2022.

Will borrowing rates rise?

Many experts project that the Bank of England’s base rate, currently at 0.1 per cent, will rise in early 2022. This will likely cause interest rates to increase slightly from these all-time low 2021 rates, although mortgage lenders competing with one another should keep interest rates relatively low.

Zoopla predicts that the average mortgage rate will have reached 3 per cent by the end of the next year.

What does this mean for Hampshire?

Rural areas are becoming increasingly desirable. The pandemic has altered what people are looking for in a home; instead of central city locations, buyers are searching for more space with larger outside areas. Work from home trends have allowed employees to move further away from business centres.

Alresford and Winchester are among the most sought-after locations in the UK, offering rural surroundings with good transport links to London and Southampton. This part of Hampshire boasts a plethora of independent shops and restaurants, scenic walks and good local schools.

Already one of the most expensive places to buy in the UK, these desirable traits will likely drive prices higher in 2022.