Rising prices will slow down
The coming year could stabilize the British real estate market after a record jump in prices in 2021, when the phenomenal activity of buyers led figures to record highs, writes The Guardian.
Last year, about 1.5 million home purchases were made in the U.K., the highest in years. According to the trade association UK Finance, 2021 was the most successful year for mortgage lending since 2007. It estimated that £316 billion worth of home loans were made.
James Thatch, head of data and research at UK Finance, said, “We are seeing a return to a stable trajectory for primary lending.” Re-lending, he said, is on the rise. In two years, borrowers will want to refinance five-year fixed-rate loans, leading to an increase in repeat mortgages.
At the same time, home affordability for new buyers has remained low because of record price levels. According to Propertymark, by November 2021, one agency branch had an average of 20 homes for sale, the lowest rate in 20 years. And 38% of the properties were sold at an inflated price.
Industry representatives say that realtors often simply do not have enough properties to meet demand. Tim Bannister, director of the agency Rightmove, said: “Over the past 18 months, the real estate market has been frantic. The change in lifestyle due to the pandemic has caused a change in needs as well. However, while covid is still a strong influence on society, we expect the housing market to approach normalcy during 2022.”