UK house prices have continued to rise strongly throughout 2021, increasing by 5.6% in the first six months and driven by elevated levels of demand. It’s expected that by the end of the year, the UK will see prices rise by a total of 9%.
Demand from buyers for UK property continues to rise while supply has hit an all-time low. Sales agreed year-on-year has risen by over 30% across the UK, while exchanges have also increased by 55% – a clear signpost of how quickly demand is outstripping supply.
Savills predictions suggest that the North West and the Midlands will be the leading regions for growth in England over the next four years – seeing 28% and 24% price increases respectively. In 2022 specifically, Savills have forecast growth of 4.5 and 4% in these locations.
Hamptons, meanwhile has also released its housing market forecast for 2022, predicting that property price growth will remain above pre-pandemic levels as the cycle ends in 2024. It says that a second wave of lockdown-induced demand will keep price growth in positive territory at 3.5% in 2022, 3% in 2023 and 2.5% in 2024.
As we move forward over the next few years, a low interest-rate environment, tighter lending criteria coupled with the fact there’s been considerably less house price growth over the last 16 years means we’re more likely to see a continuation of modest price growth, such as we’ve witnessed during the last five years, rather than a boom followed by a bust.
To put this into context, between 1976 and 1991 house prices across Great Britain grew by 466%; between 1992 and 2007 they rose 265%; but between 2008 and 2024 we expect house prices to rise by 61%. This means a period of more balanced price growth across the regions as a new cycle dawns.
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