Will The Housing Market Crash in 2022?
The burning question on everyone's mind right now: will there be a housing market crash in the near future?
We have seen phenomenal activity within the market in recent times due to a multitude of factors such as Rishi Sunak’s stamp duty relief, national lockdowns which changed many lifestyles, the push for hybrid working and the shift in household income. As our economic and social environments changed, so did our perspectives and priorities, which often meant that in most cases it was time for a house move.
Where there’s high demand, and relatively low supply there are high prices and since the pandemic, house prices have risen by record-breaking amounts in our region according to Rightmove.
So is that old saying true of "what goes up must come down"?
Richard Smailes MNAEA MNAVA, partner here at FSS states that: “there is undoubtedly going to be a correction in the market due to the rising inflationary pressure on costs, such as fuel, food and utilities and the fact that wages are not rising to keep pace. Therefore if people can’t borrow more, which they can’t due to rising interest rates and a lack of more income, then the only thing that can happen is a price drop in houses.”
However Richard confidently stated that: “with every market there are opportunities. A lower house price starts to make things more affordable for those looking to get onto the housing ladder.” Therefore suggesting that the future looks bright for first time buyers.
For those looking to move up the market the gaps between the prices becomes closer. Richard gave the example of “someone looking to move from a £250,000 to a £500,000 house at the moment faces an increase of £250,000. If the market were to drop by 10% then their current property drops to £225,000 and the one they are buying to £450,000, therefore the gap is £225,000 and also a saving in the stamp duty payable.”
One person’s loss may well be another person’s gain as the market begins to change.
Partner Dan Brumfitt added that he expects to see the market to continue to move and thinks that prices will begin to rise again in early 2024. He states that: “we are in interesting times globally, which could impact the housing market this year and next. But this will simply cause the market to flatline whilst wage growth catches up to cover the increase in commodities and charges.”
Dan believes that “money is still comparatively cheap and the government are looking at packages to stimulate economic growth”. He also stated that “a strong demand vs average supply of good quality housing in affluent areas will underpin what has always been a generically strong market in North Yorkshires property hotspots!”
The market doesn’t stay still, but we should always look at the positives, because with every ‘correction’ there comes opportunity. If you have any questions for any of our experienced team, then please do not hesitate to get in touch on 01423 501211 or email email@example.com .