Activity levels remain high as housing market continues to defy the odds
While many expect a more balanced market to emerge over the course of 2022, there is no sign of a change in direction yet, as annual house price growth remains at an all-time high. for 17 years and a record number of properties sold under contract within the first week of marketing.
Nicky Stevenson, MD of Fine & Country UK, comments: “The number of buyer inquiries per property for sale is traditionally highest in March, April and May, 2022 being no exception. With the biggest mismatch between demand and supply at this time of year on record, Rightmove’s report says more than one in five properties are currently moving from listing to sale subject to contract (SSTC) in just one week and almost half in two weeks. It is estimated that 75% of properties successfully find a buyer, compared to a historical average of around 50%.
She points out that the average price of a property coming on the market has crossed the £350,000 mark, while Nationwide reports that at 14.3%, the annual price growth in the year to March is at its highest level since November 2004.
She adds: “With stiff competition for available properties, many sales are subject to ‘best final offers’ and almost 40% of properties are selling at or above the asking price. Despite fears that a lack of properties for sale will impact transaction levels, mortgage sales and approvals so far in 2022 are above the longer-term average seen between 2017 and 2021. , the annual price growth is evident in all countries. major markets in England and Wales.”
She comments that at the end of 2021 the UK economy was only 0.1% below its pre-Covid level at the end of 2019. However, the Chancellor, in his spring statement, warned that the global economic outlook is “difficult”.
Stevenson notes: “The Office for Budget Responsibility has lowered its forecast for UK economic growth in 2022 to 3.8%, significantly below the 6% predicted in October. Reports show consumer confidence has also fallen for the fourth month in a row as pressure on household finances mounts.Record food, fuel and energy prices are expected to lead to average inflation of 7.4%, peaking at over 8% in the last quarter, while wage growth is expected to be 5.2%.
“In a bid to calm the price spiral, the Bank of England raised the base interest rate for the third time in four months to 0.75%, still low by historical standards, but further hikes While many households will benefit from a Council Tax refund and change to the National Insurance threshold, the ONS reports that household savings levels are now at their lowest level since the start of the pandemic.”
She adds: “As energy and fuel costs rise, we are likely to see more buyers consider energy-efficient properties. According to new research from Aviva, 37% of adults said they would consider the energy efficiency of their next home, a huge increase from the 22% who did for their current home.”
She concludes: “A much higher proportion will take into account the condition of the double/triple glazing, as well as the insulation of the walls and the roof. More than 25% would like to buy a home with a renewable energy source and 22% would like an electric vehicle charging station. Energy efficiency is one of the main reasons people consider new construction, virtually all of which are EPC “A” or “B” rated. Although nearly half of current homeowners believe that major green changes would be too costly, the government’s announcement of 0% VAT on materials and the installation of energy-efficient equipment for homes could well make some owners reconsider.”