2021 was a monumental year for the UK housing market and everyone involved within in.
On the back of an imminent closing of the stamp duty holiday – which we now know was subsequently extended – the opening few weeks of the year was a blur of activity for intermediaries, lenders, surveyors, conveyancers and borrowers as an unprecedented volume of property transactions were being processed in anticipation of the expected deadline.
The following two quarters saw vast amounts of business being written across the mortgage market, albeit in slightly less frenetic conditions.
Inevitably, the final quarter saw a slight lull as the curtain finally fell on the much vaunted stamp duty holiday and seasonal influences impacted activity levels across the purchase market.
After such a whirlwind, we can now reflect, regroup and analyse the year that was amidst a raft of industry data which really helps to encapsulate 2021.
The final Nationwide House Price Index of the year outlined that annual house price growth remained in double digits for December at 10.4%, making 2021 the strongest calendar year performance since 2006.
Prices rose by 1% month-on-month, after taking account seasonal effects, with the price of a typical UK home hitting a new record high of £254,822, up nearly £24,000 over the year.
In figures released late last year, UK Finance predicted that house purchase activity will hit £200bn in 2021, up 53% when compared to 2020 and buy-to-let purchase activity will increase to £18bn, up 83% on the previous year.
These predictions suggest that total house purchase transactions, including cash purchases, are likely to reach 1.5 million in 2021, some 47% higher than 2020, and the highest number since before the global financial crisis. The trade body also estimated that overall gross lending will peak at £316bn, up 31% on 2020,
Finally, the latest figures from NAEA Propertymark revealed that the average number of house hunters registered per estate agent branch stood at 571 in November, a figure that has been climbing since June 2021 and an increase of 12% from October’s figure of 511.
In contrast, the number of properties available per member branch stood at just 20 in November, a continued decline from 21 in October and the lowest figure Propertymark has ever recorded. This means there is an average of 29 buyers for every available property on the market, a 21% increase in competition from October.
This combined data really does demonstrate some of the key trends experienced throughout 2021. It would take an extremely brave person to make any specific predictions for the housing market in 2022 as we continue to face influencing factors which are often way beyond our control and move at such pace that it’s difficult to look too far ahead.
However, as we enter 2022, what we do know is that homeownership aspirations appear to be stronger than ever. The cost of borrowing remains extremely low for a vast proportion of borrowers.
The housing market is remarkably resilient. A lack of affordable housing and a housebuilding industry hit by rising costs and a skills shortage means that the supply gap is likely to grow.
Attitudes to our homes are also changing in terms of the need for additional space – both inside and outside – which will encourage more homeowners to evaluate their options, whether sizing up or raising capital to implement home improvements.
In short, it’s going to be another busy year and I for one can’t wait to see how the housing and mortgage market evolves over the course of the next 12 months.
