2021 Housing Market Performance
2021 has been another eventful and action packed year for the housing market! Property prices continued to increase - year end is expected to hit 10%+! The Bank of England held interest rates at an unprecedented low level of 0.1% until 16 December, when they were increased to 0.25%.
Average house prices increased by 10.2% over the year by October 2021, down from 12.3% in September 2021, according to the Office of National Statistics. This percentage increase is equivalent to £268,000, which is £24,000 higher than in October 2019.
Across the regions, prices increased as follows:
England - £285,000 (9.8%)
Wales - £203,000 (15.5%)
Scotland - £181,000 (11.3%)
Northern Ireland - £159,000 (10.7%)
London is the region with the lowest annual growth at 6.2%
Halifax report that house prices have risen for the 5th straight month, resulting in a 15-year high. Russell Galley, Managing Director, says:
“On a rolling quarterly basis the uptick in house prices was 3.4%, the strongest gain since the end of 2006, bringing the new average property price up to a record high of £272,992. Since the onset of the pandemic in March 2020, and the UK first entering lockdown, house prices have risen by £33,816, which equates to £1,691 per month."
Rightmove have reported that the price of property coming onto the market in December witnessed the usual price dip, down by 0.7% (-£2,234). However, valuation requests were up 19% on December 2019. With two months of data yet to be reported by Rightmove, 2021 has already seen the highest level of completed home sales since 2007, and Rightmove expects 1.5 million for the full year (the average is 1 million per annum). 70% of properties advertised on Rightmove are currently marked as sold subject to contract, compared to just 20%2, underpinning our prediction of a further 5% price rise in 2022.
Tim Bannister, Director of Property Data, says:
"The kind of frenzied market we’ve seen in the last 18 months happens only a few times in most home-owners’ buying and selling lifetimes, exacerbated by the even rarer event of a global pandemic pushing homes higher up most people’s priorities."
There's lots of insight in Rightmove's latest report including the average time it takes to secure a buyer. In November, it took on average 38 days compared to 52 days in December 2019.
Bank of England data has showed the number of UK mortgages approved in October fell to the lowest level in 16 months. The value of mortgage advances in Q3, 2021 was £73.4 billion, £15.6 billion lower than the previous quarter, although 17.4% higher compared with Q3, 2020.
Nationwide have indicated that annual house price growth increased to 10.4%, from 10.0% in November, with 2021 being the strongest calendar year for house price growth since 2006! The average price of a UK home hit record a high of £254,822, up nearly £24,000 over the year.
Robert Gardner, Nationwide's Chief Economist, says:
"Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September. Mortgage approvals for house purchase have continued to run above pre-pandemic levels, despite the surge in activity seen earlier in the year. Indeed, in the first 11 months of 2021 the total number of property transactions was almost 30% higher than over the same period of 2019.
At the same time, the stock of homes on the market has remained extremely low throughout the year, which has contributed to the robust pace of price growth."
Nationwide's reflection of the average UK house price continues to show growth in the sector over the last 10 years.
Outlook for 2022
Rightmove suggest that there will be strong buyer demand in 2022. They expect prices to rise by another 5% in 2022. Tim Bannister, Director of Property Data, says:
"While the pandemic is still having an ever-changing impact on society as we head into the new year, we expect a housing market moving closer to normal during the course of 2022. A return to a less frenetic market due to more choice, and forecast slightly higher interest rates, will suit many movers who have held back during the last 18 hectic months. With a jump in the number of owners requesting valuations from agents with a view to marketing their homes, it looks like many of this group are now gearing up to make it a new year resolution to move, so more buyer choice could now be on the cards.
A rise in interest rates is likely next year, and whilst a rise is often regarded as unhelpful to the market, a slowing of the fast pace of sales, and associated pace of price rises, will help the return to more normality that will suit many movers.”
Rightmove has coined the phrase ‘power buyer’ as someone who is a buyer who has sold subject to contract or can buy without selling. This type of buyer has been successful in securing their property during 2021 and Rightmove expect such buyers to continue to be successful during 2022.
Nationwide has indicated that they expect the housing market will slow in 2022 given the potential significance of Omicron and the wider economic considerations. Robert Gardner, Nationwide's Chief Economist, says:
“It appears likely that the housing market will slow next year, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax. The Omicron variant could reinforce the slowdown if it leads to a weaker labour market. Even if wider economic conditions remain resilient, higher interest rates are likely to exert a cooling influence.
However, the outlook remains extremely uncertain. The strength of the market surprised in 2021 and could do so again in the year ahead. The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth. Indeed, the Omicron variant could serve to reinforce the shift in preferences in the near term."
Halifax has taken a conservative approach to 2022. They are forecasting a flat performance of the housing market. Russell Galley, Managing Director says:
"We expect that house prices will maintain their current strong levels but that growth will be broadly flat during 2022.There is still a large degree of uncertainty around this forecast, particularly the extent to which savings accrued during the pandemic continue to boost housing transactions and prices, and how lasting the recent shifts in housing preferences prove to be.”
Our 2021 Results
Despite the difficult conditions we've all experienced because of the pandemic, at sort style and stage, we've had our best year to date. We've added so much value for our clients - here's our top 5 results:
We have added 30% to one of our investor clients in terms of increasing their property valuation and monthly rental yield. We also let the property on the first viewing! Learn more here.
Our average time to sell following our staging is 1 week.
We add, on average, between 10-30% to the property valuation for our staging clients.
We've grown. We're now a team of 16, covering all property services from renovation, refurbishment, interiors (including blinds for doors and windows), landscaping and staging. Here's one of the gardens we transformed.
5. We've consistently achieved 5* ratings from our clients. As a result, we've achieved a Centre of Excellence from Bark. Here's some examples of our incredible client feedback:
Our 2022 Outlook
Although 2022 brings with it much uncertainty, we are so excited about the opportunities ahead. We have exciting adventures ahead and will soon announce the next step on our journey - do stay tuned!
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