The UK housing market resisted falling off a “cliff-edge” last year, but 2022 could be a different story.
While some dips were recorded in the latter months of last year - particularly property sales which plummeted to a nine-year low in October - house price growth ended on double digit growth in December.
“Despite much speculation, we did not see a ‘cliff-edge scenario’ when the stamp duty holiday concluded in September,” said Vikki Jefferies, proposition director at mortgage network Primis.
“As many predicted, and with the help of government collaboration, the market remained buoyant.”
Three months on from the stamp duty holiday, activity levels are still high and brokers anticipate steady demand to continue, according to Jefferies.
She said this could be bolstered by “a rush of new buyers” who have waited for the tax holiday to end in the hope house prices will level off as a result.
“With 2021 set to be the busiest year since 2007, many will anticipate 2022 to be a slightly quieter year for the housing market,” said Jefferies.
“However, a renewed focus on remortgage activity will help to make up for any potential shortfall we see as a result of a decrease in the number of house purchases.
“It is positive that we have a market which remains highly competitive for consumers who need to remortgage. If purchase activity was the big mortgage and housing trend of 2021, then we are likely to see the returning dominance of remortgaging in 2022.”
And even with the Bank of England raising the base rate to 0.25 per cent on December 16, Jefferies reckoned brokers still had an opportunity to point their clients towards longer-term fixed rates which take advantage of the current lows.
“Repayment rates offered by lenders also remain low, mortgage availability is strong and there is still high demand in the market, creating a prime opportunity for brokers looking to secure excellent deals for their clients.”
But going into 2022, Jefferies said one “big question mark” remained around the supply of property coming to market – both new build and ‘second-hand’.
“The UK continues to suffer from a chronic undersupply of housing, and the rising house prices triggered by high levels of purchase demand over the past 18 months have further highlighted this,” she said.
“For the market to be healthy and sustainable, the government needs to commit to addressing the undersupply of quality housing stock, and it would be positive to see the introduction of measures to ensure house building targets are met.”
In September, Michael Gove replaced Robert Jenrick as housing secretary as part of a cabinet reshuffle.
One of Gove’s first moves in office was to “pause” planning reforms promised by Boris Johnson last year, and instead embark on a review.
Many dubbed the move a U-turn, as the reforms had set out to reduce the power of local councils to deny developments so as to speed up delivery of new houses amidst the backdrop of a supply and demand crisis.