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UK housing market on track for bumper year of sales, but market forecast to slow in 2022

2021’s market looks set to record the highest level of sales (1.5m) since 2007

Combined market activity this year is forecast to amount to £473bn in transaction values

Following a busy time in the UK housing market, 2021’s market looks set to record the highest level of sales (1.5m) since 2007.

Combined market activity this year is forecast to amount to £473bn in transaction values – an increase of £95bn on 2020, says Zoopla in its latest monthly House Price Index.

It says there is no indication of a drop in demand for homes and the impact of the Covid-19 pandemic has further to run in Q4 and then into next year.

House price growth is shown to be currently running at 6.6%, although there is marked disparity across regions; these range from 2.3% in London and 10.4% in Wales.

The latest data indicates a clear turning point in house price growth, which has now reached its peaked, and the growth rate of newly agreed sales is lower.

Looking into 2022, higher than average house price growth is expected to stay in the most affordable markets, which is where existing growth is highest.

As higher living costs and increased mortgage rates impact next year, however, buying power will be impacted.

Zoopla says that overall house price growth in the UK is expected to slow down to 3%, with 1.2m sales next year.

Richard Donnell, Zoopla, said: “2021 is set to be a record year for the housing market with the most moves by homeowners since 2007 and nearly £500bn of home sales. 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.”