Mortgage rate hikes will normalize the market next year -…

UK house prices have hit an all-time high – but the housing market will normalize in 2022 thanks to buyer caution over mortgage costs.

This is the view of Zoopla, which released its latest monthly house price index, which shows that strong buyer demand and lower housing stocks have increased typical house prices by £ 16,000 over the past 12 months.

That 7.1 percent annual increase in average house prices is down from 7.6 percent in August.

Zoopla says that buyer demand is currently falling in line with seasonal trends, but they expect it to pick up sharply again after Christmas.

Housing stock has been in decline throughout the year and is currently down 33.2 percent, creating intense competition among buyers in the market and ultimately accelerating property price growth.

The rise in house prices has increased the equity of households in the UK. These increases, along with homeowners looking for additional space, will underpin new supply pipelines and demand levels in the first quarter of 2022.

While the supply-demand imbalance is likely to persist, a normalization of the market in the first half of next year will allow the sales pipeline to be rebuilt.

Grainne Gilmore, Head of Research at Zoopla, comments: “This year has been a record year for the market, with stamp duty vacations and homeowners’ pandemic search for the highest sales since before the financial crisis with 1.5 million transactions.

Zoopla advantage

“However, such a busy market has undermined the number of homes available for sale because properties have been bought up so quickly. This imbalance between supply and demand has pushed prices up. ”

Mortgage rate hikes will normalize the market next year - warning

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