Will the UK Housing Market Crash in 2022?

You probably have been seeing a lot of doom and gloom in the news recently relating to rising living costs, spiralling inflation, and tensions in the labour market, it has truly been an unnerving time for many.

Today, we wanted to create an article from our home team to you, to provide some reassurance of what’s to come in the property market.

One thing to keep in mind is that every region is different, one may be excelling, while others may be taking a decline. With that in mind, we will be focussing our article on the Derbyshire area.

Since reopening after the first coronavirus lockdown, we have seen the property market run hot for over two years which is completely unheard of in the industry!

While we expect the property market to cool, this does not mean that we believe there will be a price crash like we have already seen in the 2008 financial crisis.

Here’s what we know…

Well, the most obvious point is that demand and house prices have surged since 2019, despite the coronavirus crisis being at large. With various initiatives being introduced including the Stamp Duty Holiday, since then, demand continues to rise with sales and lettings being agreed quicker than ever!

What does the market look like right now?

Right now, the best placed buyers are well-off homeowners who spend less on energy and food and have benefitted from double-digit house price growth in the last two years, they have also worked from home and built-up their savings.

That is not to say that first time buyers are being pushed out of the equation, in fact, we have seen a high number of first-time buyers approach us for properties!

UK mortgages are becoming less risky

Today, very few buyers are going for 90% or more loan-to-value mortgages. Because of the lowered risks in borrowing these days, many borrowers will not be caught out by rising interest rates and be forced to sell.

Even if mortgage rates increase to moderate the level of demand, it is not likely that it will make a huge difference as mortgage payments are relatively low compared to a buyer’s income.

In conclusion, we believe that there is potential for sales to slow down or stagnate by the end of the year because of high prices demanded by sellers and a gloomier economic backdrop, we do not believe that there will be a crash.

We’d love to know how you feel about the property market and its future, share your thoughts with us on social media!

Looking for Commercial Property? Meet the specialists...