That halcyon new year two years ago when no-one had heard of Covid is another world, as 2022 begins with the pandemic continuing. Actually, 2022 is the first for three years when we start January with a sense that the coming 12 months will see a return to something approaching normal.
Even two years ago, we were still reeling from uncertainty over Brexit, a new government, and economic uncertainty. 2021 started with the country in lockdown, a situation which endured for nearly half the year.
Compared with those massive uncertainties, and now unfettered by stamp duty tax incentives, the property market for 2022 is feeling much more predictable, notwithstanding the fact that we are still learning to live with Covid. Despite Omicron, there is no prospect of the economy and society being shut down, and the most pessimistic experts are starting to say that the next few months will see us emerging from Covid uncertainty.
For the housing market, this will thankfully see a return to a degree of normality. After a period during which prices were driven up both by Londoners taking advantage of working from home to move out of the capital and a shortage of supply, a more balanced market is on the cards at last this year.
The supply issue is something of a vicious circle. Many potential vendors have not come to market because they have been worried that they won’t be able to find somewhere to move to. This chain is likely to be broken in 2022 as sellers who have hunkered down during Covid now feel confident to emerge into the light.
Confidence is of course the thing that drives the property market, and it is uncertainty which wreaks the most damage to confidence levels. Emerging certainty about the route out of the pandemic, coupled with a sense that we are getting to grips with Brexit, means that confidence levels are higher at the start of 2022 than for at least three years.
We expect to see activity levels increasing as the supply of homes increases into 2022. People will still be looking for space, both inside their homes (for family and for working from home) and outside, whether that is in the form of gardens attached to the home, or outside space readily accessible from the home.
Not everything on the market is listed on property portals – some estimates say that up to 30% of property changes hands without ever making it ‘online’. So be sure to make friends with agents where you are looking; if they don’t know you’re there, they can’t call you when they get the ‘nod’ on a new instruction that’s perfect for you.
The rapid price growth of the past 12 months is likely to slow down a little, to a more sustainable level: expect prices to rise between two and six per cent this year, depending on property type and location. That is a healthy rate of increase, especially given the rising level of inflation.
We all want a dose of normality in our lives right now – it looks like 2022 might just be the year that delivers it.
Jan Hÿtch is residential partner at Arnolds Keys.
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