I can’t believe it’s been a whole year since I reflected on the market and what we’d achieved. Where has the time gone?
Let’s take a look back and remind ourselves about what happened in 2021 and what’s to come for the property market in 2022.
What drove the 2021 property market?
2021 was the busiest year for the property market since 2007.
The Covid-19 pandemic triggered what property experts have dubbed a once in a lifetime reassessment of their home among consumers.
Successive lockdowns, combined with homeschooling and remote working, caused people to want a property with more space inside and somewhere to relax outside.
This trend started in the second half of 2020, but really picked up steam in the past year, as homeowners realised the pandemic wasn’t going to be over quickly and flexible working became the norm for many.
Activity was further stoked by the stamp duty holiday on homes costing up to £500,000 that was in place during the first half of the year.
These dynamics saw one in every 16 homes change hands in 2021, making it the busiest year for the property market for 14 years.
2021 property market saw house prices soar.
Even more homes may have been sold during 2021, if the market wasn’t suffering from a chronic mismatch between supply and demand.
In fact, while the number of potential buyers in the market was running at 28% above the five-year average in the final part of the year, the supply of homes for sale was 42% below it, according to property website Zoopla.
Unsurprisingly, with a high number of buyers chasing a limited number of properties, prices were pushed higher.
Zoopla’s latest figures had annual house price growth running at 6.9% in October. Nationwide Building Society put the figure even higher at 10% in November.
Consumer buyer habits changed, perhaps for good.
The pandemic has fundamentally changed the type of homes people want. Larger family homes with space to work from home and a garden are in high demand, while flats, particularly those that do not have access to outside space have fallen out of favour.
Buyers’ preferences are reflected in price gains, with the average cost of all types of houses jumping by 8.3% during the past year, while the typical cost of a flat has edged ahead by just 1.6% during the same period.
For most of the past year, people have also shown a strong preference for properties in rural or commuter locations, as many workers are no longer expected to turn up in the office every day.
There was a slight rise in demand for homes in city centres during the second half of the year as ‘Freedom Day’ saw the return of some people to the workplace, while restaurants, cinemas and nightclubs reopened, increasing the desirability of city living. Even so, the majority of buyers are still focused on rural or suburban locations.
The outlook for the housing market in 2022.
- Activity levels are expected to remain high during the early part of 2022 as pent-up demand caused by the pandemic continues to feed through
- House prices are expected to rise by 4% in 2022
- But the market faces a number of headwinds, including interest rate rises, stretched affordability and economic uncertainty
- January, April and September will see highest level of cessations for years, huge opportunities for remortgage business
The housing market enjoyed a strong year in 2021 as the Covid-19 pandemic acted as a catalyst for people to move home. But while house price growth ends the year on a high note, a number of factors could cause the market to slow in 2022.
Look out for my outlook on 2022, I’ll be posting that shortly.
What happened at Eligible in 2021?
Flicking through my notes from 2021, I can tell you exactly where the time has gone: finessing our product, with most updates fuelled by user feedback:
We’re now trusted by 1400+ advisers, monitoring £18bn+ in mortgages and delivering 9x product ROI! Talk about ending the year on a high!
A final thought…
Thanks to all those that contributed to the success of the past year… 2022 will be no different for us, we will continue to dedicate our time to servicing our customers and partners, both old and new.
Wishing you all a happy new year, full of health, happiness and many prosperous opportunities for your business.
Keep an eye out for my extended outlook on 2022…