Forecast for 2022 house prices taking economic impacts and the war in Ukraine into account

House price rises for now but a slow down is forecast

Average house prices rose by 7.8% in the year to January, taking the average house price to £244,100, according to the latest Zoopla report. House price growth over the same period in Yorkshire and the Humber was 8.5% in January with Wales showing the highest rise with 11.7%, followed by the South West with 9.7% and the North West with 9.2%. London had the slowest growth at 3.1%.

Zoopla analysts sat that the new year surge in buyer demand is starting to ease, albeit at a modest pace and add that there are good signs for future stock levels, with new supply running ahead of 2021 levels in every region.

Sign up to our daily newsletter

Scotland, the East Midlands, the North East and Yorkshire and the Humber, saw new listings over the last two months exceed levels seen in 2017-2020 over the same period, a sign that more homes are coming onto the market. There has been a particular rise in family homes listed for sale, which should help deflate rapid price growth.

House prices still buoyant but growth set to slow

However, Zoopla predicts that prices will begin to slow during 2022 and will end at an average 3.5% in December 2022. Its analysys say that economic headwinds, including the increasing cost of living and rising mortgage rates, will start to put the brakes on house price growth. They add that global uncertainty and volatility resulting from the invasion of Ukraine, will have economic impacts around the world including the UK this year.

At the moment market is highly localised with price growth over the year to January 2022 ranging from 16.6% in Powys in Wales to -2.2% in the City of London. Affordability, working practices and property type are all factors that have determined gains over the last two years. Liverpool leads the city growth with residential property values up 10.3% between January 2021 and January 2022 and Aberdeen saw the greatest price decline of -0.3%. Sheffield recorded an 8.7% uplift and Leeds a 8.2% gain.

While new listings for flats is higher, there is still a shortfall in new listings for terraced, semi-detached and detached homes compared to longer-term norms, and signals that the dent in total stock levels for these homes will take longer to right itself.

Family homes continue to sell very quickly, with three-bedroom houses across the UK reaching sale agreed status by an average of 23 days after being listed. This compares to a one-bedroom flat in London which takes on average 53 days from listing to sale agreed. This slower moving flats market means the average price of an apartment across the UK rose by 2.6% in the year to the end of January.

This is the highest level of growth for flats since 2017 but it still trails price growth for houses – with the average value of a semi-detached home in the UK rising by 9.1% over the same time frame. While new supply is starting to improve, the speed at which the market is moving means that in January, around a half of properties put on the market progressed from listing to sale agreed within three weeks.

In comparison, last year, around a third of properties were progressing this quickly through the purchase process. This underlines that it will take time to start to rebuild the total stock of homes in the market.

Please support The Yorkshire Post and become a subscriber today. Your subscription will help us to continue to bring quality news to the people of Yorkshire. In return, you'll see fewer ads on site, get free access to our app and receive exclusive members-only offers. Click here to subscribe