2021 Market Overview
As we approach the Christmas period, you may be looking to put your feet up and enjoy a mince pie whilst forgetting about the property market. However, here at Global Residential we wanted to give you one last market update for December and some insight it to what we expect to see in 2022.
According to the Halifax house price index, the strength of the property market continues with growth at 8.2% which is a 15 year high. In addition to this, house prices rose by 1% in November. Making this the fifth straight month of rising property prices. Analysts identify this is because of a shortage of supply and heightened demand as consumers have experienced a desire to relocate after lockdowns as well as stamp duty holiday reliefs. Nevertheless, even since the stamp duty has been reintroduced, we are still seeing upward pressure on house prices.
According to Zoopla, across their platforms, 82% of stock available is for sale. This means that there is a worryingly low number of supply available for rent (18%), causing rental prices to be forced up in recent months. Rents in city centers are outpacing elsewhere as a resurgence of activity has returned to cities across the UK, especially in the north where affordability of living is more favorable than London. The trend throughout the year has been that the lack of supply cannot match demand in the market as we discussed in our last blog referring to Manchester. So, record high property and rental prices have people mindful that we have hit a peak in the market and concerned we could enter a ‘bubble’ scenario? Based on research conducted by our team of experts, it is quite clear that we are currently in a property boom phase.
With the use of the ‘18-year property cycle’ developed by the economist Fred Harrison, we can make an educated estimate as to what may happen. That said, we cannot guarantee the future. Our interpretation and use of historical data taken from the UK land registry, along with careful analysis, has allowed us to make our own internal assumptions.
So, have you missed the time to buy, or can you still use the boom to your advantage?
The most important element to remember with property investing is that historically in the UK, if you hold property for long-term growth, then you will see a return on your investment and property prices go up over time. We all want to be able to purchase at the bottom of the curve, but this isn’t always possible and luckily for investors, the growth period of this boom still has a long way to run. We are currently in the beginning of the boom phase and growth is going to continue in 2022 and beyond. Further investment from large corporations across the UK is very promising for the expansion of many cities and ultimately the growth of property.
To understand about the UK property market and gain any advice on your next or current investment please get in touch with one of our experts by contacting us via our homepage.
Global Residential wishes you a very Merry Christmas and a Happy New Year!!
Source: halifax, zoopla