What will happen to the housing market in 2022?

Caz Blake-Symes • January 10, 2022
housing market forcast 2022

Moving into 2022, the housing market will be influenced by both positive and negative factors. On the positive side, the pandemic-induced search for space has further to run.  The ability to work from home has expanded the horizons for many office workers who now feel able to look further afield.

Zoopla research shows that 22% of people currently want to move, significantly higher than the usual 5% in a normal market. The high levels of equity homeowners have built up during the past 18 months and the shortage of homes on the market is expected to support house price growth well into 2022.

But on the downside, the rising cost of living, combined with an expectation that mortgage rates and taxes will rise next year, will impact affordability.

House price growth is expected to end 2022 at 3%, with growth likely to be strongest in the East Midlands and North West and weakest in London. Transaction levels are expected to fall by 20% to 1.2 million, in line with the long-running average but still comparatively high compared with the past decade. House price growth expected to slow in 2022 with regional variations

Richard Donnell, of Zoopla, said: ‘The impact of the pandemic on the housing market has further to run but at a less frenetic pace.  We expect the momentum in the market to outweigh some emerging headwinds from higher living costs and the risk of higher mortgage rates.  The latest data shows a turning point in the rate of house price growth, which we expect to slow quickly with average UK house prices up 3% by the end of 2022.’

What could this mean for you?

First-time buyers

The market remains fast-moving and is not expected to start slowing down until well into 2022. As a result, you’ll need to be prepared to move quickly if you see somewhere you like. It’s a good idea to have a mortgage offer agreed in principle before you start house hunting. With many potential buyers looking for more space, particularly a garden, you may find you have more choice and less pressure if you opt for a flat.

Home-movers

If you’re thinking of moving, it remains a great time to put your home on the market as demand from potential buyers is continuing to outstrip supply. Unfortunately, these same dynamics may make it challenging to find your next home. Do as much research as you can before listing your current property and talk to local estate agents to find out how fast the market is moving in your area.  If the market is moving very quickly, you may want to have an offer accepted on a property you want to buy before listing your current home for sale.

Bristol, Bath and Exeter Mortgages Online will gladly discuss all your mortgage options with you to best meet your current and predicted future needs looking at the whole-of-market


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Boost to buying power from changes to affordability tests

By Caz Blake-Symes • May 1, 2025
Adapted from Zoopla’s April 2025 Housing report I mage: The analysis uses average house prices from the house price index and for first-time buyers to assess mortgage payments at different mortgage rates applied to a 30- year mortgage, at different loan-to-values. One emerging trend that we expect to positively support market activity in the coming months is a relaxation in how lenders assess the affordability of new mortgages. While buyers focus on the mortgage rate they will pay, lenders also check whether the borrower can afford a 'stressed mortgage rate' at a higher level than the borrower will pay. ​ While the average 5-year fixed rate mortgage is around 4.5% today, many lenders are currently 'stress testing' affordability at 8-9%. This makes it harder to secure a mortgage without a large deposit. If average mortgage stress rates were to return to pre-2022 levels of 6.5% to 7%, this would deliver a 15-20% boost to buying power. ​ An average first-time buyer with mortgage repayments of £1,020pcm at a 4.5% mortgage rate would typically have to prove they could afford monthly repayments of £1,550pcm at an 8.5% stress rate. If the stress testing is relaxed to 6.5%, repayments would fall to £1,275pcm, boosting buying power. It's a similar pattern for the average homeowner, while the actual impact will vary by lender and type of borrower. ​ This change would consequently supporting demand and sales volumes, helping to clear the stock of homes for sale, rather than boosting house prices. Other existing rules and regulations that remain in place will continue to impact the availability of mortgage finance.  Comment from Phil Clark “This is potentially very exciting news and will give borrowers a greater choice of products if these rules are relaxed. Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about the Mortgage and Protection products we offer, please visit www.bristolmortgagesonline.com Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

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By Caz Blake-Symes • February 19, 2025
Adapted from BBC Article by Kevin Peachey, Cost of living correspondent 13 February 2025 Two major lenders launched mortgage deals on Thursday with interest rates of less than 4%, as competition picks up in the sector. The prospect of further cuts in the base rate by the Bank of England has given mortgage providers confidence to reduce their own rates. But the attention-grabbing sub-4% deals by Santander and Barclays will not be available to all borrowers, particularly first-time buyers, and may come with a hefty fee. The return of such deals might prompt other lenders to follow suit after a period of tepid competition. Nationwide, the UK's biggest building society, has said it will reduce some of its rates on Friday. Mortgage deals with interest rates below 4% have not been seen since November. Across the whole market the average rate on a two-year fixed deal is 5.48%. The typical rate on five-year deals is 5.29%, according to latest figures from Moneyfacts. Time to decide Some tracker and variable rate mortgages move fairly closely in line with the Bank's base rate, which was cut to 4.5% a week ago. However, more than eight in 10 mortgage customers have fixed-rate deals. The interest rate on this kind of mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it. About 800,000 fixed-rate mortgages, currently with an interest rate of 3% or below, are expected to expire every year, on average, until the end of 2027. That means a higher monthly bill for many homeowners on their next renewal, but there are signs that the rate they could pay is on its way down.  Bank of England governor Andrew Bailey said the interest-rate setting committee expected to be able to cut rates further "but we will have to judge meeting by meeting, how far and how fast". This will affect savers who are seeing lower returns, but could bring better news for borrowers. The Bank's next rates decision is on 20 March. Message from Phil Clark “Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about Mortgage and Protection please visit www.bristolmortgagesonline.com
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