The United Kingdom is now experiencing a housing price boom. The stamp duty break, changes in lifestyle, and cheap loan rates all contributed to a 10.9 percent year-on-year increase in prices in May.
While analysts believe this favorable trend will continue into 2021, what does this indicate for 2022? Let’s have a look at what will happen to housing prices in the future.
What Will The Housing Market Look Like In 2021?
To forecast where we are going, we must first understand where we have been. Thus, let’s take a look at what’s been occurring with home prices in 2021 so far.
The extension of the stamp duty holiday has had the greatest influence on the property market this year. Originally scheduled to terminate in March 2021, Chancellor Rishi Sunak said that it would be extended until the end of June before tapering off and reverting to regular rates at the end of September.
As a result, the market has been swamped with prospective purchasers hoping to obtain a new house before the tax incentive expires in the coming months.
The Bank of England has also maintained interest rates low in order to assist borrowers during the pandemic. While rates have begun to rise again, they are still far below pre-pandemic levels.
We are now experiencing higher demand for residences, but there is no rush of new properties entering the market.
Prices rise when there is more demand than supply. That is precisely what occurred in the UK property market in 2021.
Will House Prices Continue To Climb In 2022?
The question on everyone’s lips is whether housing prices could continue to increase at the current rate, or if the market will correct.
Forecasts are varied, but the good news is that no one anticipates a significant drop off.
While the end of the stamp duty vacation is likely to chill home prices, there are still a number of factors supporting real estate values.
Demand continues to exceed supply. And, in the aftermath of the pandemic, consumers are still trying to make lifestyle adjustments. People are searching for something new from their house as they spend more time at home and work remotely.
There is worry that once the furlough program expires, unemployment would grow. Experts are expecting that a strong rebound in the third and fourth quarters of 2021 would lessen the damage.
As a result, Capital Economics forecasts annual home price inflation of 3% through the end of 2024. Meanwhile, Savills predicts that prices would rise by 5% in the UK over the following five years, until 2025.
In the end, only time will tell.
Is It Better To Purchase Or Not To Purchase?
If you are considering relocating, you may be asking if you should do it this year or wait until prices have stabilized.
That is a difficult question to answer. When it comes to purchasing and selling a property, keeping records of shifting house prices is obviously critical. However, a lot will rely on your particular personal demands and financial situation.
If the home you desire is available today and you can pay it, it may be worthwhile to pursue. Because interest rates are now low, there are some attractive mortgage options available if you have a substantial deposit. And, thanks to the government’s mortgage guarantee plan, options for people with a little deposit are now becoming accessible.
There are no guarantees, even if you read every projection available. At the present, housing prices are expected to level off slightly. However, anything is possible from now until 2022. As a result, you must decide if you are willing to wait for improvements that may or may not occur.
How To Look For Below The Market Value Properties?
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You’ll save both time and money! The platform’s ability to find high-yielding assets is its major selling point. If you want to invest in UK real estate, DealSourcing.co is a no-brainer.
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