In 2022, house prices in the UK will hit a record high. What opportunities and challenges will there be in 2023?

In 2022, house prices in the UK will hit a record high. What opportunities and challenges will there be in 2023?

In 2022, house prices in the UK will hit a record high. What opportunities and challenges will there be in 2023?

2022 will be a year full of changes and challenges for the UK housing market. Under the influence of the epidemic, politics and economy, housing prices and rents in the UK have fluctuated to varying degrees, and different regions and types of housing also have different performances. This article will review and look forward to the main data and trends of the UK housing market in 2022, providing investors with a reference.

 

UK house prices set to hit record high in 2022
  House price rises to record high

According to data from Rightmove, the largest real estate website in the UK, the average house price in the UK will rise by 6.9% in 2022, reaching a record high of 300,000 pounds. This increase is the highest in the past seven years and more than six times the average monthly increase in the five years before the epidemic.

The main reason for the increase in housing prices is that the demand for housing exceeds the supply. Under the lockdown, many people have reassessed their housing needs, giving new consideration to the balance of indoor and outdoor space. At the same time, the British government has introduced a series of favorable policies, such as the 95% government guarantee plan and the first-time home buyer plan, etc., which have reduced the down payment pressure of home buyers and stimulated market activities.

  Housing types and regions vary significantly

Despite the rise in house prices across the UK, there has been wide variation in the performance of different housing types and regions. According to the Rightmove report, two out of every three homeowners saw their home increase in value by at least 1% in the past year, but that number has dropped to just one over the past six months. And falling values ​​also increased, with one in four homeowners experiencing a £7,700 (approximately 2.6%) loss in value.

Where house prices will rise fastest in the UK in 2022
By type, smaller homes – terraces, semi-detached houses and apartments – held better value than more expensive detached houses and bungalows. That’s as many buyers seek more affordable options amid heightened cost-of-living pressures. Larger homes, popular during the pandemic, are facing price cuts as demand weakens.

Regionally, more than a quarter of all house values ​​grew in the North of England, the Midlands and Wales, while just under a quarter in the South of England, Scotland and Northern Ireland. This is because home prices in the south are higher, requiring larger mortgages, and currently higher mortgage rates are causing buyers to be wary. As a global financial center and an education hub, London still attracts many high-net-worth individuals and international students, but there are also differences between different regions within it.

  Steady growth in rental yields

In addition to the buying and selling market, the UK rental market also shows promising prospects. According to Zoopla, average UK rents rose by 4.6% in the year to the end of September 2022, the fastest annual increase since 2008. Among them, the rent increase in London is the most significant, especially in East London, which has achieved the highest rental yield by virtue of the convenience of commuting and low prices. It is the only place where the average rental yield reached or exceeded 6 % of the region.

  Apartment “EMPIRE HOUSE” in the center of Halifax, from £90,000, ready-made houses with leases

The main reason for the rent increase is the recovery of rental demand and the shortage of supply. With the unblocking in the UK, more and more people are returning to work in office buildings, and there is a greater demand for residences close to the city center and with convenient transportation. At the same time, during the epidemic, many landlords converted their rental properties into short-term rentals or sold them, resulting in tight supply in the rental market. These factors have all driven up rents, providing investors with steady income.

  Outlook for 2023

Looking forward to 2023, the UK real estate market still faces some uncertainties and challenges, such as mutations in the epidemic, economic recovery, and changes in interest rates. However, the British government and banks will continue to introduce a series of supporting policies and reforms, such as property rights law reform, international education strategies, etc., to improve the business and investment environment in the UK and attract more talents and capital. At the same time, as a diversified, innovative and international country, the UK will continue to make efforts in the fields of technology, finance, and education, bringing more opportunities to the real estate market.

Overall, the UK real estate market still has strong resilience and attractiveness, which deserves investors’ attention and layout. However, when making a decision, you should also pay attention to analyzing the specific conditions of different areas and types of houses, as well as your own needs and budget.

Leave a Reply

Your email address will not be published. Required fields are marked *