The previous two years have been two of the most hectic years the property market in the UK has seen in recent history, with a combination of exceptional circumstances, legislation and a dearth in supply causing house prices to reach record heights.
For estate agents in Hull, for example, prices have risen nearly 7 per cent in just 12 months, and at one point every single market sector and region in the country increased at once, creating the first property market ‘full house’ since 2007.
However, with the promise of a potentially less eventful 2022, some analysts have predicted that the housing market will slow down over the next 12 months to return the market to a close-to-normal level.
One of the first signifiers of a slowing market has already taken place, with the Bank Of England increasing their base rate from 0.1 per cent to 0.25 per cent, which has a consequential effect of increasing mortgage and interest rates, especially for trackers that adjust based on the BoE rate.
Whilst still a low rate, this, in combination with further uncertainty, higher rates of inflation and the potential for this BoE rate to treble by the end of the year could highlight a slowdown in the market, particularly for first-time buyers, although five per cent mortgage guarantees could help offset this.
Legislation, which in the form of the stamp duty holiday dominated the property market discourse of 2020 and 2021, is unlikely to be as much of a factor, which should encourage a return to normal for property prices.
Demand remains high, with the huge disparity between supply and demand being the main talking point of the late 2021 housing market. With more people seeking valuations of their homes, this is another factor that could help lower prices over the next 12 months.
There is still so much that cannot be predicted about the next year, and it remains to be seen whether the housing market will continue to be one of the biggest talking points of the year.