Good question, and it’s one we’re hearing more than we have done in the last few years. As dedicated movers with a passion for what we do, we get into all sorts of conversations with our customers and clients.
And because we always want to make sure our services are tailored to people who really need them, we take the time to do our background research too.
Along the way we’ve seen the UK housing market chop and change, so we thought we’d get everything down on paper in this simple guide. Here’s everything you need to know.
What is the housing market in UK doing right now?
Right now the UK is facing an uncertain and drawn out end to the pandemic, and the restrictions that come with it, in addition to a new cost of living crisis.
The knock-on effects of the pandemic and the damage done to businesses around the world are beginning to filter back into the market in the form of higher, and more unstable pricing on everything from utilities and fuel to food and clothes.
This means that the typical UK household is facing eye-watering sums like £2,000 a year on utility bills alone. Add in the fact that many have had to change jobs or become underemployed, and you have the recipe for a cost of living crisis that will then impact the housing market.
Does this mean the housing market in UK is slowing?
When people have less money to spend, you would normally expect to see the sale of houses slow, average prices drop and the bottom start to fall out of the UK housing market. 2022, on the other hand, is shaping up to be a year unlike any in recent memory because of the two years that led up to it.
In the pandemic restrictions like social distancing and right to remain for tenants caused a huge backlog of house moves to build up. Many families and young professionals who would have made a new life for themselves during 2020 and 2021 are only just setting out on the road to doing so now.
This means that despite the cost of living crisis, there is also a demand for new housing and options to move that is now outstripping supply. When that happens prices naturally increase because the homes on sale are more sought after. The end result for buyers and sellers? The average UK home is selling for almost 10% more than it would have done just 12 short months ago.
Will UK house prices continue to rise?
This is a hard one to put specific numbers to and quantify in a meaningful way due to the number of moving parts involved, and the sheer complexity of modelling an economy in such a state of flux.
To help show why we, and the experts out there, expect house prices to continue to rise at a similar rate over the next 12 months, we need to consider three things:
- New homes are not really being built at anything like the rate needed to offset the accelerated demand placed on the housing market by the backlog of first-time buyers and prospective movers. This means that demand will continue to outstrip supply, causing prices to rise regardless of the commensurate cost of living crisis
- Interest rates are increasing which means that mortgages are more expensive to get. The fact that money is now harder to borrow isn’t expected to slow the market down. What it will certainly do is push out those who tend to have smaller savings and no assets to trade in for their home — mostly first time buyers. What then happens is the market is left up to those with greater equity and cash liquidity who can bid against one another and again push up house prices
- The UK may open up faster than Europe and get a surge in business from abroad. While this won’t necessarily mean a large influx of foreign naturals buying UK homes, it will kickstart the economy and drive other inflationary pressures like consumer spending for what may turn out to be a rather limited range of goods and services at first
Now that we’ve covered the basics of the economics involved and given you a quick insight into the various forces at play, it’s time to focus on you: the consumer.
Should I buy a house in the UK in 2022?
This is the question that’s on the minds of every UK buyer, landlord and investor right now, and with good reason. While we think you shouldn’t have to put your life aspirations on hold due to issues beyond your own personal control, it is worth noting that the pressure of an inflation rate that’s pushing well above 5% at time of writing (The Bank of England target is a humble 2%) is pushing up mortgage rates.
Because prices are changing, banks want to make sure that they still make enough money when they lend to you over the long term. The knock-on effect is that it’s more expensive to get a mortgage than it was before the pandemic, and more expensive than in 2021 for that matter.
If you want to buy, you have the funds, and you’re passionate about moving into your forever home, by all means go for it.
Just bear in mind that you will need to revisit your savings and borrowing figures if you haven’t done so in the last 12 months. Armed with the right information, and realistic expectations, you’ll be able to make the smart choices that make all the difference to your future. There is however another route to consider at this point.
Am I better off renting for the rest of 2022?
You will pay less to rent a comparable property in the UK than to buy it this year, to the tune of approximately £70 per month.
This can add up to a sizable amount of your first-time buyer deposit by the end of the year, so is well worth considering if you’re prepared to be flexible.
That said, it’s far from certain that we won’t see a sudden climb in rental rates due to landlords having to push some of their increased mortgage payments on their tenants. This will be particularly likely in the case of landlords who are on tracker mortgages designed to follow the Bank of England base rate (recently up from nothing to 0.5%).
If you’re happy to wait a little while, you can still enjoy life, and you’re prepared to be flexible then you might look back on renting in 2022 as a smart move. It will also give you greater freedom in the months ahead as the (hopeful) end of the pandemic restrictions, the cost of living crisis and of course the Brexit fallout all converge on the UK economy.
Removal Service after buying a house or flat
While far from an exact science, we expect to see house prices continue to rise month on month as demand outstrips supply and inflation begins to bite. Eventually this trend will plateau and those who wish to move are priced out of the market and, but don’t expect that to happen any time in 2022.
If you are looking into buying a new house or apartment and need a removal service, you can look into our removal service for houses and flats.