Many people hope to improve their economic situation by investing in property in 2022. With inflation and interest rates at their lowest levels in decades and the economic outlook improving, they are considering buying a home. Will this affect the property market? Will this year be a good time to apply for mortgage? In this article, we will look at what happened in 2021 to consider the future of the UK property market:
What 2021 Was Like for the Industry
Contrary to what many have predicted, 2021 saw an increase in property sales in the UK, with more homes sold in 2021 than in the last 14 years. The stamp duty holiday announced in July 2020 is one of the biggest reasons for the increased activity in the property market.
In order to help people who wished to purchase a home without overburdening themselves with stamp duty, the government had a set period where they would not charge the tax up to a certain amount. That tax exemption was scaled back in 2021 and still stands today. There was a predicted downturn in the property market as a result, but that has not been borne out.
A third major factor that led to an increase in home sales in 2021 was changing people’s preferences. As lifestyles changed and more people wanted second homes and remote working spaces, there was a significant increase in demand for homes.
What Is the Forecast for Property Market in 2022?
The forecast for property in 2022 is one of increased sales. The stamp duty exemption will end in 2022, but there are signs that people are buying homes in anticipation of that, so the market might not be hit as hard as predicted.
Many people will at least be saving for a home, and that will probably affect the economy in a positive way. As the demand for property increases, costs will go up, but the outlook is still good at the moment.
Changing Lifestyles
Although we have seen that some people are investing in property in anticipation of the stamp duty increase in 2022, we have also seen a changing trend in the UK property market. More people are opting to live in smaller and smarter homes.
The rise of tech in the home is also likely to affect the property market. As more smart devices become commonplace, with smart TVs, smart fridges, and smart heating and lighting, the home will become a place that is used for entertainment and relaxation. This means that the living room will become a space for only the most important activities, such as eating and sleeping.
Why First-Time Buyers Could Have a Much Easier Time
As people live in smaller spaces, they will perhaps not be able to afford as much in the way of furniture and decorations as they might like. This could very well mean that there will be more people who rent out rooms in their homes to people they know, in order to make some extra money. This could then decrease the demand for first homes but increase the demand for smaller but smart homes, which would be more attractive to people who rent out rooms.
Conclusion
The housing market is constantly shifting, and the outlook for the UK property market in 2022 is expected to be very good. The stamp duty holiday from the government will end in 2022, just as the economy is being hit by inflation.
This could be a double hit for the market, but the outlook for 2022 is still positive.
A good property in a good location will have no trouble selling, so if you want to apply for a mortgage in 2022, it is a good time to get in touch with the experts.
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This article is for information only and should not be seen as advice or a recommendation to act. As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments.