26 Following


Important UK property market forecasts for 2022


2021 brought us rising property prices alongside other surprises, with the last three months of the year seeing the fastest growth in prices in the last 15 years. House prices are going up with the highest quarterly rate since 2006, bringing the average price of a home to a record-breaking £272,992. A few factors are leading to the current outcome in the UK housing market.


The ongoing housing shortfall is playing a part, with the government plans to build 300,000 new properties within 2022 to meet the high demand being one of the reasons. Other factors involved were the stamp duty holiday, urbanization as the tenants are returning to the office, their changing priorities and more. After the period of remote work is beginning to near its end, the returning employees are checking the rental market in the UK's largest urban areas.


House Price Growth


The national asking price for a property is expected to rise by 5% in 2022, with an increase of 17,000 GBP. Property prices in the sector have risen five months in a row by November 2021 and they were 8.2% higher than the previous year in the same month. This trend is expected to continue throughout 2022, with the supply and demand imbalance and the workers going back to the office.


Which Regions Are Experiencing the Highest Price Growth?


The 2022-2026 residential forecast report by JLL shows the top-performing cities and regions, using economic, market and social factors to create an accurate model and forecast. The West Midlands are expected to lead the house price growth in the UK with a 7% growth.


  • Birmingham


The average house prices were GBP 233,148 and have an expected increase of 6% for 2022, the expected average price has risen to GBP 247,136. An additional 6,300 jobs have been created in the city by HMRC, attracting high earners and hosting the Commonwealth Games in 2022, raising attention to the area. 


  • Manchester


The average house price for Manchester stood at GBP 247,726 in 2021, with an expected rise of 6% in 2022, the expected GBP 262,589 average price for houses in 2022. Manchester is also seeing the highest economic growth in the next five years, with a GVA growth of 16.4%, according to Oxford Economics. The same projected price inflation is seen for Birmingham, with both cities having massive potential for investment and development.


Rental Growth in the UK Housing Market


The private rented sector has an expected 4.5% rise in 2022, according to Zoopla. This is a great sign for investors. The UK Rental Market Report shows that the average UK rent went up by 4.6% in the year leading to October 2021. Rent increases have hit a 13-year high, as the demand for property has doubled in the central zones of the major cities.


A third of millennials across the world are expected to live in rentals their entire lives, so people are now paying higher prices for their dream living experience. A prime city location with amenities nearby and co-working areas are the most desired accommodation. Estate agents will notice that renting is still the cheaper way of achieving a better lifestyle, without the sense of being locked into a location. This is a dealbreaker for many young employees on the market. The increasing costs of living such as energy bills means many people can’t afford to buy a property at all.


For those reasons, the renters are returning to the cities, but supply is lacking compared to demand.


©Open Estates