The UK real estate is one of the most dynamic in the world. As we welcome 2022, we are reflecting on what has been the strength and the resilience of the UK property market. In some areas of the country, there has been double-digit growth in property prices.
The post-pandemic property boom has seen many investors looking for new niches to invest their money. The year 2022 will likely showcase a new trend in the property market. This article will uncover some of the real estate market trends you should look forward to in 2022.
The UK property market growth
In 2021 the UK experienced the fastest ever property price growth in the market in the last 15 years. There was a steady growth in property prices throughout the year. In the first quarter towards the end of November, property prices rose by at least 3.4%. This was the highest ever since 2006.
This brought the average price of a home in the UK to GBP 272,992.
Some factors contributed to the strong performance of the UK housing market in the year 2021. Here are some of those factors:
- The ongoing UK housing shortage was the major contributor to the steadfast growth. The UK government is currently planning to build at least 300,000 new properties yearly to meet the increasing demand.
The last quarter of 2021 has shown us what we can expect in 2022, especially after the Stamp Duty holiday in September 2021. Almost 50% of the UK workforce was working from home during the pandemic.
With the post-pandemic era, most tenants are returning to office work, which is more likely to trigger rental growth in most of the largest urban centers in the UK in 2022.
The growth in house price
According to Rightmove the UK’s national asking price for the property will rise by 5% in 2022. Currently, the asking price is £342,401 in the UK, and with this increase, we should expect it to increase by GBP 17,000. There is a clear indication of what we should expect of UK property prices with the lifting of the Stamp Duty holiday.
There was a steadfast rise in property prices by 3.4% at the end of November 2011 – the highest rate since 2006. We should expect this growth to continue throughout 2022. Some of the factors that are likely to contribute to this include workers returning to the office, imbalance in supply and demand for property, and great expectations from property owners.
Regions that will experience the highest house price growth in the UK
A recent survey by JLL shows that the top-performing cities and regions in the UK consider all the economic, social, and market factors in creating the most accurate factors. In the UK, the region that will lead to the growth of house prices is West Midland, Birmingham.
Related: Enfield Conveyancing Solicitors
Property price is expected to grow by 7% in this region. This is 2% above the average national property price in the UK. You should also expect similar levels of growth in South West, Yorkshire, and Scotland. In 2022 the city of London is expected to record the slowest growth in average house prices at 3%.
Here are some key areas to watch out for in 2022:
The House price average in Manchester is expected to increase by at least 6% in 2022. The average house price for this city is currently at GBP 247,726, and with the increase, the new average house price will increase to GBP 262,589 for 2022.
Related: Top-Rated Conveyancers in Manchester
Also, over the next five years, Manchester City is expected to witness the highest economic growth of all the major cities in the UK. According to Oxford Economics, Manchester will experience a GVA growth of 16.4% in the next five years.
The average house price in Birmingham is currently at GBP 233,148. In 2022 it is expected to grow by at least 6%. Birmingham being one of the main beneficiaries of the HS2 and additional 6,200 jobs being created in the city by HMRC, is likely to attract high-earning individuals. This is the prime demographic of the build-to-rent tenants.
In 2022, Birmingham will be hosting the 2022 Commonwealth Games, which means its presence in the international spotlight will increase. This is one of the UK cities expected to witness or record the highest levels of house price growth in the next five years.
Steadfast and sustainable rental growth in the housing market
Zoopla reports that the private rented sector will grow by 4.5% in 2022. The UK Rental Market also reports that the UK rents grew by at least 4.6% in October of 2021 as demand for rental properties grew in most of the city centers in the UK.
The reason for this growth in demand for rental houses is that most tenants are returning to their offices. As demand for property keeps increasing in the central zones of most UK cities, rent increases have hit a record high in the last 13 years. For the first time in 16 months, rent in London is rising.
Also, as the third millennials start renting, tenants are now willing to pay a premium price for their desired living experience in the UK. Investors are to fill this gap in 2022 and invest in housing projects that meet this new demand.
In 2022, the UK property will grow as demand for housing and rentals in most major cities keeps rising. Also, the confidence in the resilience of the UK property market is more encouraging to those investing in the market, which will boost growth in the industry.
This year, Birmingham and Manchester will be the prime investment locations. These cities show a possibility for increase in house price and rental growth in the next five years, making them an investment hotspot in the UK.