London Property Market Forecast 2022
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London Property Market Forecast 2022: What is the London Property Market forecast for 2022? In this article, I am going to share the London property market insights from 2021, as well as look at the year ahead to see if now is the time to invest in London property.
Based on the market forecasts for London property, and looking at the previous year in the property market, you may be considering investing in London property, so utilizing this data will help you understand if buying property in London in 2022 is the right tactic.
UK Property Market Insights From 2021
The average UK house price hit an all-time high of £267,091 in December, more than £24,000 for the year, the biggest annual increase since 2003. This represents an average rise in UK house prices of 10.4% a year. Prices are now 16% higher than before the pandemic broke out in early 2020.
As you can see from this table, Wales had the highest growth with a price increase of 15%.8% compared to the same period last year. Meanwhile, in London, price increases slowed year-on-year, rising just 4.2% to an average of £507,230. This was lower annual price growth than recorded in 2020.
Average Price Changes Across The UK In 2021
1. Wales: Up 15.8% to £196,759
2. Northern Ireland: Up 12.1% to £167,479
3. South West: Up 11.5% to £294,845
4. Outer South East: Up 11.3% to £329,869
5. North West: Up 11.2% to £196,806
6. Yorkshire and Humberside: Up 10.8% to £190,855
7. East Anglia: Up 10.4% to £268,146
8. East Midlands: Up 10.4% to £221,813
9. Scotland: Up 10.1% to £172,605
10. West Midlands: Up 9.4% to £227,031
11. Outer metropolitan area of London: Up 8.8% to £410,992
12. North: Up 7.7% to £148,105
13. London: Up 4.2% to £507,230
Source: BBC Business
Some Highlights for the year:
- ⦁ Factors that have helped fuel the home buying boom include the government’s stamp duty holiday, which ended in England and Northern Ireland in September, having previously ended in Scotland and Wales.
- ⦁ Historically low interest rates
- ⦁“space race” triggered by the pandemic-induced shift towards mobile and flexible work.
- ⦁ Interest rates were raised to 0.25% from record lows of 0.1% by the Bank of England for the first time in 3 years as it tries to tackle rising inflation with prices rising at their fastest pace in 10 years.
London Property Market Statistics
According to Plumplot, which uses analysis and data from around the web, the median price for the London area by the end of 2021 was £657,000. This chart shows the comparison between the London region and England and Wales since 1995.
The following graphic shows the breakdown of objects by price class, according to the number of transactions. Most properties cost between £500,000 and £750,000 with 23,000 transactions as of November 2021.
These 2 graphs below are interesting to see side by side. It shows that the growth rate of single-family homes has far outpaced other property types since 1995, and provides insight into the needs of people seeking larger homes with more space, especially as people begin to work from home more.
The following graphic shows the breakdown of objects by price class, according to the number of transactions. Most properties cost between £500,000 and £750,000 with 23,000 transactions as of November 2021.
These 2 graphs below are interesting to see side by side. It shows that the growth rate of single-family homes has far outpaced other property types since 1995, and provides insight into the needs of people seeking larger homes with more space, especially as people begin to work from home more.
Affordability Ratio For Homes In The UK
Another important statistic to consider is the affordability of property in London relative to income. This graph and accompanying chart shows how much more expensive London is compared to other areas. With a price-to-earnings ratio of 12.5, this means that an average-income Londoner would need a gross annual salary of 12.5 to buy a property at the average price. The ratio for England and Wales was 7.69. The timeline shows that the regions were relatively even until around 2009. After that, London started to far outperform the other area but started correcting from 2016, which coincides with the Brexit vote to leave the EU.
Things To Consider In 2022 When Investing In London Property
Inflation is now at 5.1%, the highest in a decade, and Bank of England Governor Andrew Bailey expects it to rise further this year with forecasts of up to 6%.
In response and anticipation, lenders are already raising interest rates. A further rise in the cost of borrowing would result in fewer people navigating the real estate ladder and could weaken demand.
Finally, in 2022, the Crossrail / Elizabeth line system will open, which will expand the transport network. This could have a very positive impact and a sustained increase in property prices in the areas that will receive new stations or services. Be sure to check out my recent video on Crossrail and its impact on London housing.
London Property Market Property Price Forecasts For 2022
Forecasts vary, but the general consensus is that central London prices are expected to rise by 5-10% this year. In the rest of London, prices are expected to rise by an average of 2%, well below the 3.5% forecast for England.
London rents in 2021 have recovered and the average rent in London in October 2021 was about £3,431 per month, according to Zoopla. This could offer a new way for investors to enter the London property market to try to benefit from and anticipate long-term appreciation.
If you are looking to invest in property in London, be it your family home, investment property or pied a terr, contact us to find the best areas to suit your needs and budget.
Property prices in the area soared after the financial crisis as the area saw an influx of hipsters working in the tech and creative industries who had been priced out of neighbouring Islington.
London Property Prices
London’s top-performing property market is slowing
That has helped it become the capital’s best-performing borough over the past decade when price increases and percentage gains are combined, according to Anthony Codling, chief executive of property platform Twindig.
The borough could now become something of a landmark for London’s property market after the influx of tech workers who could pay down payments on houses as their stock options rose in value and helped push prices above most locals’ standards to drive out.
Shares of major tech companies like Amazon.com Inc. and Alphabet Inc. have risen sharply in recent years, only to suffer severely this year as markets plummeted. Metaplatforms Inc. Shares are down more than 40% this year, while Amazon shares are down about a third, reducing the purchasing power of potential buyers. Stocks have more than doubled in the last five years.
Meanwhile, rents in London have risen by 15.7% to almost £1,700 a month in the last year, according to property platform Zoopla. This topped the 9.1% increase in the rest of the country as people begin to return to the capital. A record 30% of homes let in London this year went to people who had previously lived outside the city, the Hamptons estate agent said on Monday.
While property values in Hackney have risen significantly since January 2018, both asking and selling prices in the borough and its adjacent areas appear to be falling, according to a finding by data provider TwentyCi. The company warned that this could be due to the nature of the properties coming to the market.
Sources:
U.K. Land Registry
People Question/Answers
What will the central London property market look like in 2022?
We forecast market prices in Prime Central London to increase by 10% in 2022. This is being driven by transactions over £3m, with particularly high interest in areas such as Kensington, Chelsea, and Notting Hill.
What will happen to house prices in the UK in 2022?
By the end of the year, prices in Great Britain are expected to rise by a total of 9.0%. Savills expects transaction and therefore price growth to continue in 2022 but will be held back by the exceptional growth we have seen this year, particularly if interest rates start to rise earlier than expected.
Awesome…good piece of information specially for people like us who are far away.
Awesome .. good piece of information specially for those who are far away.