4 Apr 2022

What to expect from the UK Property Market in 2022?

  • Property prices to rise further
  • Homebuying activity to continue
  • 2021 was the strongest for homebuying activity since 2006
  • Interest rates to increase exceeding 5% by spring
  • 51% see increased demand for bridging loans in 2021

1) Property prices to rise further

After impressive growth throughout 2021, there are now questions as to whether this trend can continue in 2022. According to the experts, the answer is ‘yes’.

Savills has forecast house price growth of 3.5% in 2022, Zoopla 3%, while Rightmove says 5%.


2) Interest rates and finding the right loan

Interest rates seem certain to increase in 2022. Inflation is expected to rise above 5% by spring, if interest rates rise, the cost of borrowing will increase. For property buyers, this raises questions around the suitability of different financial products, and how to find the best possible solution for their acquisition.


3) Covid-19 to throw out more curve balls

In 2022, further developments like this seem likely. Yet for the property market, this need not be damaging.

The pandemic so far has highlighted that demand for bricks and mortar investment does not necessarily suffer from economic turbulent or social challenges. In fact, it will often thrive because of them. In times of uncertainty, investors look to real estate as a reliable asset able to deliver long-term capital growth alongside regular rental returns.


The property market in 2021

Whilst there have been challenges, the performance of the UK property market in 2021 has been remarkable.

  • House prices have continued to rise
  • Transactional activity has reached healthy levels

The stamp duty holiday did much to spur on this activity, but it was not the only factor. In fact, UK house prices grew at the fastest pace in 15 years in the three months prior to December 2021, with the average home valued at £20,000 more at the same time the year before.

2021 was the strongest for homebuying activity since 2006. Whilst demand among buyers was boosted by the tax savings, the cheap cost of borrowing was another factor. Interest rates remained at a historic-low of 0.1% since its announcement earlier in 2021.

Of course, the imbalance between supply and rising demand has been critical in the pace of house price growth. Indeed, the housing shortage has continued to be a major issue this year. This is sure to remain the case in 2022.


Demand for bridging loans

A recent broker survey found that 51% had seen a rise in demand for bridging finance during the pandemic, compared to a mere 3% who saw a decrease.

Speed and flexibility have been key factors. Property buyers, particularly investors, have often required specialist solutions to help them overcome issues like:

  • Broken chains
  • Another lender pulling out
  • Complex set of circumstances behind their purchase



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