2020 was a year that promised a lot but didn't deliver much. The property market began the year with a flourish, fueled by the confidence engendered by a definite general election result in late 2019. It was the most successful start to a calendar year since 2016. But, after three months, Covid put a stop to it all.
Two years on from the first rumblings of a virus spreading across China, it’s increasingly looking like the housing market of early 2022 has strong parallels to the start of 2020. With the first few weeks of the year typically dictating the strength of the market during the rest of it, we are expecting the remainder of 2022 to play out similarly to 2020 if Covid hadn’t come along.
Two years after the first signs of a virus spreading across China, it's becoming clear that the property market in early 2022 will bear striking similarities to the housing market in early 2020. We predict the balance of 2022 to play out similarly to 2020 if Covid hadn't come along, with the first few weeks of the year often deciding the strength of the market for the rest of the year.
The strength of the market is evident nowhere more than in the time it takes to sell a home. The average time to sell a home in the United Kingdom has dropped to just under a month, down seven days from two years ago. Every region of the UK is now faster to sell a home than it was at the start of 2020, with Wales rising from the slowest to the second-fastest selling location in the country (82 days in February 2020 to 23 days in 2022). Between this year and last, the time it takes to sell in Tendring, Essex has decreased noticeably.
Other indicators suggest that the market in 2022 will be much stronger than the one that was abruptly halted two years ago. So far this year, more purchasers have registered than in any year since 2016, surpassing even the levels recorded at the beginning of 2020. However, there are 12% fewer properties on the market this time around, a number that has been progressively decreasing every year since 2016.
So what does this mean for the rest of the year? Based on the first few months of 2022, we’re expecting an above-average number of people to move home this year. While there will be fewer moves than in 2021 when transactions hit a 14 year high, the numbers look likely to top the five-year pre-pandemic average. To enable this we’re expecting stock levels to gradually improve throughout the year, something we're starting to see in some markets as the threat of Covid begins to lift and would-be sellers become more comfortable about having buyers in their homes.
Meanwhile, house price increases have been larger and more persistent than after any prior stamp duty break. Despite this, we anticipate a slowdown in growth in 2022. Affordability will be impacted by small increases in mortgage rates and a cost-of-living issue. Furthermore, a partial recovery to pre-pandemic levels of demand is expected to dampen demand in some of the busiest markets while stoking it in regions where the pandemic had a negative impact.