Another year is approaching, but unlike the previous one, 2022 should bring with it far less uncertainty, particularly in the real estate market. Not only did the initial stamp duty deadline raise the prospect of a home market crash in 2021, but the persistent uncertainty around Covid-19 provided for a grim economic outlook. People looking to buy and sell properties are wondering what the new year holds for them in their property journey.Those looking to sell their homes in 2022 can get an accurate estimate of the pricing through free property valuation which will aid them in the selling of the property. What does 2022 hold for the UK housing market, with an economic recovery in full swing and pre-pandemic circumstances on the horizon?
Following the economy’s 9.9% contraction in 2020, even a small increase in 2021 would have put the country on a better footing for the year. Although original predictions put GDP growth at about 1.1 percent, the Covid-19 vaccination programmes sparked an economic recovery that greatly outstripped expectations.
With travel restrictions lifted and numerous industries reopening, forecasters predict that the GDP would have grown by 6.8% by the end of 2021, up 5.7 percent from earlier expectations in just a few months. Despite the relaxation of travel limitations, international travel regulations have pushed the housing market even higher. With the growing popularity of staycations,the short-term rental business has exploded, with suburban areas and seaside towns becoming destinations for short stays.
The rise of short-term rentals will not only benefit the UK property market in the future, but it will also provide investors with significantly more options when it comes to property investment. This growing optimism, when combined with the expected 5.3 percent economic growth for 2022, offers both more investment opportunities and the certainty of a strong economy.
Property Forecasts That Look Good
While the property sector defied all expectations during the worldwide pandemic and prospered through a recession, the economic prognosis for 2022 aligns with rising property values and robust rents. The end of the stamp duty holiday might have gone a variety of ways, the majority of which resulted in a drop in demand and house prices. Instead, the momentum created by the tax benefit is projected to keep prices rising in the coming year.
Property prices are expected to rise by 3.5 percent in 2022, following a 9 percent increase by the end of the year, and total growth in the property market will reach roughly 21.5 percent by 2025, according to projections. This indicates the expanding prospects for capital growth in the next few years for anyone planning to invest in 2021 or 2022.
Property is a long-term investment, and it appears that this trend will continue in 2022 and beyond. However, with rental rates in the United Kingdom expected to rise by up to 17% by 2025, the passive income that property provides is still another reason to invest in 2022.
Although there has been development in both the sales and rental industries in the United Kingdom, some cities and towns have increased more than others. Some of the country’s established cities, such as Birmingham and Manchester, will always be serious contenders for investors, but many emerging cities are giving them more to consider.
Birmingham will always be a goldmine for those searching for a city with a long history of both economic and property price growth, with more reasonable costs than the capital but equivalent potential. According to the SevenCapital ‘Birmingham Investment Guide,’ property prices in the second city are expected to average £214,696 in 2022, which, when combined with the city’s 6.56 percent rental return, makes Birmingham a great place to invest in the new year.
The rise of the outer commuter belt and suburban areas, on the other hand, has revealed various pockets of opportunity. Bracknell, for example, a commuter town about 49 minutes from London, expects rental growth of 8% and home price hikes of around 19.1% by 2025. Bracknell property could offer investors nearly 20% capital growth by 2025, thanks to a multi-million pound regeneration scheme, highlighting the unique opportunities within the Bracknell property market.
Derby is yet another emerging market that has flourished since the pandemic and is on its way to becoming one of the UK’s most important cities. While Derby already has major companies like Rolls Royce and Bombardier, it also has one of the country’s largest city centre regeneration sites. As a result, the city expects demand and the housing market to rise in the next few years.
When it comes to property investment, there is no such thing as a “one size fits all” approach, and there is almost never a good moment to invest. Although every investor’s situation is different, the UK property market in 2022 offers a plethora of alternatives.
Not only is the momentum from the stamp duty holiday expected to keep property demand robust – both in established cities and growing regions – but the optimism of the 2022 economic projection provides certainty of a stronger economy, which will encourage future property expansion.
Top places to invest in 2022
Over the next five years, Manchester is expected to have the highest sales price and rental growth of any UK city. According to the survey, rental costs in Manchester are expected to grow 16.5 percent by 2024 (5-year cumulative), 15.9 percent in Birmingham, 14.8 percent in Liverpool, and 14.2 percent in Leeds. Northern Powerhouse cities may offer some of the strongest rental growth available on the market to investors. The market for new, high-quality rental properties is robust across the country, which is encouraging for both property investors and tenants. As a result, there is a continual flow of tenants looking for apartments in areas with good quality of life, decent transportation, and close proximity to local amenities.
Property in Liverpool is undoubtedly something to keep an eye on while putting together an investment portfolio, thanks to its low housing prices and high rental demand. Birmingham, dubbed the UK’s “second city,” like many of the other cities on the list, has a long history of dominating the investment sector.
Investment demand has never been stronger as more projects in its ‘Big City Plan’ – another rebuilding endeavour – come together. Savills predicts that Birmingham will be one of the fastest-growing regions in the country during the next five years, with price increases of 24% by 2025. Investing in Luton buy to let properties may not be the most obvious choice, but it could be one of the most advantageous options in the next two years.