House price growth to slow after summer peak, according to Hamptons
A combination of low interest rates, the return of high-value mortgages, and consumer demand for more space and greater working flexibility triggered by the pandemic, will cause house prices to rise in the three next few years, depending on the real estate agent’s housing market. Forecast report.
It says “a second wave of foreclosure-induced demand” will see house prices rise 3.5% in 2022, 3% in 2023 and 2.5% in 2024.
This will mark the end of a housing cycle, which began in 2008, which the survey finds typically lasts 16 years.
The report points to data from the Office for National Statistics to prove the slowdown in house prices this year. It showed that house prices across the country rose 8% in the 12 months ending in July, from a peak of 13.2% in June.
The Hamptons report states that the end of the stamp duty holiday combined with the fact that house prices were already recovering at the end of last year means that he expects price growth to slow to 4, 5% in the last quarter of 2021.
This will leave the average UK house price at £ 258,000 in December, a similar level to July.
In 2022, the report states, “The desire for more space and the ability for workers to split their time between home and office will continue to drive the market in 2022.
“Equity-rich homeowners have dominated real estate market activity since the start of the pandemic, but we expect a second wave of foreclosure-induced demand from those who haven’t been able to move out this year. “
Similar pressures will drive price growth in 2023 and 2024.
A record-breaking first half means more homes will sell in 2021 than any year since 2007, with the survey predicting 1.5 million completions.
The report states: “In 2022, activity will be supported by households that have not been able to move in 2021 due to pressures on affordability, uncertainty of employment or because they have not been able to relocate in 2021. could not find a suitable property.
“The number of first-time buyers is expected to increase over the next year as higher mortgage rates become cheaper.”
It forecasts 1.25 million transactions in 2022.
And adds that “a growing economy and low interest rates” will see completions reach 1.3 million in 2023 and 2024.
The report expects rents to increase by 3% this year.
But adds, “We expect the rapid growth rate of the rental market to slow down in 2022.
“But the rate of increase is still expected to be above pre-pandemic levels, supported by the willingness of tenants to pay for additional space and by unprecedented levels of inventory.”
He predicts that rents will increase by an average of 2.5% in 2022, but adds that further “growth will be dictated by changes in people’s incomes in 2023 and 2024”.
Aneisha Beveridge, head of research at Hamptons, said: “The housing market has muddied expectations and forecasts over the past few months.
“In the fall of 2020, the economic challenges were such that we could not have considered the extraordinary demand for relocation that we have experienced this year.
“But there has been a huge change in attitude towards property, which cannot be attributed to the stamp duty break alone.
“People now value their homes more because they’ve spent more time there than ever before.
“Flexible and remote working, which is expected to continue, has encouraged households to make greater moves.
“As a result, it is likely that more homes will have been sold in 2021 than any year since 2007.
“This is why we also believe that the housing activity will go beyond the pre-pandemic period into 2022 and beyond.
“The pandemic has accelerated the reduction of the house price gap between London and the rest of the country.
Even so, we still expect London to underperform the rest of the country until 2024, when the cycle is likely to end.
“While we will see some stabilization over the next few years, the gap between house prices in the capital and other regions should be larger than that observed at the end of the previous cycle in 2007.
“And this divergence will define the pattern of future performance. “