The UK property market has undoubtedly seen a tumultuous period since the end of 2022.
Fluctuating statistics, record-breaking demand, falling supply, and concerning economic projections have left many scratching their heads and wondering:
The following guide presents a summary of the property market in 2022, as well as a look towards what the future may hold for the rest of the year and beyond.
What Happened to the UK Property Market in 2022?
January
Property prices, on average, increased by almost 10% from 2021
Despite a slight dip in property prices, the market remained strong, with the highest growth (12.5%) in the East and South West regions
The rental market also saw growth due to continued demand for rental properties
March
March saw the strongest monthly house price growth in 18 years at 1.1%
Low housing supply contributed to skyrocketing prices
The rental market grew by 10.4%, indicating ongoing demand
April
Rental growth was widespread across the country, with the highest increase in rental prices since 2011
Affordability became a concern as house price growth outpaced income growth
May
A 16% increase in mortgages for first-time buyers compared to pre-pandemic levels
Some areas experienced significant rental price rises, but overall growth started to slow down
June
Annual price growth dropped by around 5% from May to June
Property investment cooled down as the cost-of-living crisis began to make rising house prices unaffordable
Housing supply still low, but demand decreased as people prioritized other expenses
July
House price growth rose to one of the highest rates in 2022, most likely due to the lower prices from the stamp duty holiday in 2021
Rental prices were growing almost six times higher than pre-pandemic levels, with the strongest markets being in the North West
August
Rising living costs and reduced housing demand contributed to slower growth
Popular areas like the North West, however, continued to see high rental demand, with the region seeing growth of around 10%
September
The UK found itself in a complex political situation with the Government's controversial Mini-Budget, and the death of Queen Elizabeth II
Rental sector growth remained steady, but borrowing mortgages became more difficult with rising interest rates
October
The majority of the mini-budget was reversed, following a massive detrimental economic effect
As the cost-of-living crisis steadily continued, as well as the unstable economy, a cap on house prices was beginning to limit rates
November
House prices fell by -0.9%, the biggest drop since June 2020
Market activity decreased, with mortgage approvals returning to pre-pandemic levels
The end of the Help-to-Buy scheme affected affordability and resulted in falling prices
December
House prices fell for the fourth consecutive period, down -0.1% from November
Average rent decreased slightly from November but remained higher than the previous year
Property Market Predictors
Following a lack of demand for expensive property and more buyers preferring affordability, many experts predict a continued drop in prices across many regions, with interest rates rising alongside.
If prices do slip in 2023, though, buyers should write off the property market as a viable option. Recent forecasts show that, despite significant drops in 2023, the market is expected to recover, with certain regions predicted to see price growth of 11.7% by 2027.
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Author
Nigel Lewis
Nigel Lewis is a property writer and editor with a 27-year track record working for national newspapers, magazines, websites and also leading content media agencies and portals.
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