2020 was a year that promised so much but delivered so little. On the back of confidence generated from a definitive general election result in late 2019, the property market opened the year with a flourish. It was the strongest start to any year since 2016. But inside three months Covid put a halt to all of this.
Two years on from the first rumblings of a virus spreading across China, it’s increasingly looking like the housing market of early 2022 has strong parallels to the start of 2020. With the first few weeks of the year typically dictating the strength of the market during the rest of it, we are expecting the remainder of 2022 to play out similarly to 2020 if Covid hadn’t come along.
Nowhere, is the strength of the market more obvious than in how long it takes to sell a home. The average time to sell a home in Great Britain has slipped to just below a month, seven days faster than the same time two years ago. It’s quicker to sell a home in every single region of the country than it was at the start of 2020, with Wales moving from the slowest to the second-fastest place to sell in the country (82 days in February 2020 to 23 days in 2022). London has also seen a notable shortening in the time it takes to sell between this year and last.
Other measures also show that the market in 2022 looks even stronger than the one which was hastily put on ice two years ago. The start of this year has seen more buyers registered so far than in any year since 2016, surpassing even levels seen at the start of 2020. But this time around there are 12% fewer homes on the market, a number that has been steadily dwindling every year since 2016.
So what does this mean for the rest of the year? Based on the first few months of 2022, we’re expecting an above-average number of people to move home this year. While there will be fewer moves than in 2021 when transactions hit a 14 year high, the numbers look likely to top the five-year pre-pandemic average. To enable this we’re expecting stock levels to gradually improve throughout the year, something we're starting to see in some markets as the threat of Covid begins to lift and would-be sellers become more comfortable about having buyers in their homes.
Meanwhile, house price growth has proved stronger and stickier than after the end of any previous stamp duty holiday. But despite this, we are still expecting growth to slow over the course of 2022. Small increases to mortgage rates and a cost of living crisis will impact affordability. Furthermore, a partial return to pre-pandemic norms is likely to somewhat soften demand in some of the busiest markets, while stoking it in places that had been adversely affected by the impact of the pandemic.