Sarah Beeny: how to ensure your property sells fast for the best price
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Since the first lockdown, the property market has boomed with a number of factors causing hundreds of thousands of people across the UK to reconsider their living situation in light of what is likely to be long-lasting changes to the way we live and work. On top of this, the housing sector is facing an acute shortage of homes for sale after record transactions took place toward the end of the stamp duty holiday. Currently, with the new Omicron variant, it’s uncertain what economic impact it will have on the property market.
Most experts have uncertainties when it comes to house price predictions for 2022 due to the new Covid variant spreading rapidly.
Martijn van der Heijden, Chief Financial Officer at Habito said: “It’s really hard to predict where house prices will go in 2022, and anyone who says they do know, probably shouldn’t be believed. “No one has a crystal ball on this!
“The big watch-out is that we’ve got the Omicron variant spreading rapidly.
“Right now it’s unclear what economic impact that could have on people’s jobs, ability to view homes, or their appetite to move.”
“Everyone is hoping that the Omicron wave won’t have anywhere near such a drastic impact on the property market.
“However, at this moment we don’t know how long the Government’s directive to work from home will continue (for those that are able to), if more restrictions are on the way in January, or if the Treasury will be stepping in to financially support the people and businesses who are impacted.
“Clearly this could reduce demand for different types of buyers for different types of property, depending on their job security, location and household financial outlook.”
However, despite uncertainties, looking at last year’s figures, house prices had risen £20,000 in just 12 months and led to 1.5 million housing transactions, so property prices may continue to be on the rise this year.
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The property expert added: “For comparison, the first wave of the pandemic back in Spring 2020 caused the property market to shut down overnight.
“However, by June, with the help of the Stamp Duty holiday, we saw lots more people moving for more space and gardens. Demand for homes shot up, continuing into 2021, fuelled by bigger deposits saved during successive lockdowns.
“This caused house prices to rise £20,000 in just 12 months and led to 1.5 million housing transactions, the highest number since before the global financial crisis in 2007.”
The stamp duty holiday – which was worth up to £15,000 on the first £500,000 of a purchase until the end of June, has now ended entirely and the rates in England and Northern Ireland have returned to their ‘normal’ thresholds.
Martijn said: “As things stand now, despite the stamp duty holiday ending on 1 October, prices are continuing to stay high because there are limited properties being listed for sale, mortgage rates are low, and wages have risen five percent on average this year.
“Before Omicron, demand for rental flats in cities was starting to rise again as people were returning to urban areas for work and there’s no reason to think this trend won’t continue once we’re past this wave.”
Martijn said the housing market is facing “wider economic headwinds” in 2022 which could impact overall stability. This includes rising interest rates, which is poised to threaten the market’s growth.
He said: “We’re facing wider economic headwinds with rising inflation.
“The Bank of England is staring down the barrel of decade-high inflation rates and wondering how they can manage that and avoid a truly bleak mid-winter. Typically higher interest rates increase the cost of borrowing, which cools house price rises.
“The Office of Budget Responsibility (OBR) has forecast that rates could reach as high as 3.5% by 2023. This means we are likely to see the beginning of the end of the era of record-low interest rates.
“If mortgages become more expensive and if food, fuel and energy price increases really bite, this could impact consumer confidence and dampen house prices.
“To summarise, if 2021 was a frenzy of buying activity, 2022 looks set to be more slow and steady.
“However there’s so much we can’t know about the UK’s economic performance over the next few months, that really, property demand dynamics could go in either direction.”
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