A leading agency predicts that prime central London house prices, so long in the doldrums throughout the pandemic, will bounce back by 10 per cent in 2022.
And the agency, Strutt & Parker, says mainstream house prices throughout the country will grow by up to seven per cent next year.
Although these figures would make a strong market by any observer’s standard, the agency says the market frenzy of 2021 will not recur next year.
Guy Robinson, head of residential at Strutt & Parker, says: “The residential market has made a significant recovery in the last 12 months. This has been fuelled by high levels of demand across the market and attractive mortgage rates, while a rebound in the economy gave buyers and sellers confidence to trade up or down the housing ladder.
“Following significant house price growth year to date, rising at a rate that had not been seen for seven years, the outlook remains positive for 2022 and beyond. Buyer demand continues to be robust and applicant numbers are still significantly higher per property than any time since 2006.
“We are still seeing exceptional demand for family housing in the country with access to facilities and connectivity especially along the coast. That said, it is still unclear the extent to which the shifts in behaviour and lifestyles witnessed will materialise into permanent shifts in market demand. More time will be needed to adjust to these factors and there could be further corrections in the early part of 2022.”
And the agency’s head of London – Louis Harding – adds: “The first half of the year in PCL saw a record-level of transactions, supporting positive year-on-year growth. However, Q3 was unable to sustain or build on this momentum. As a result, prices have steadied in recent months and have yet to see the same rebound in growth as the mainstream regional market. However, we expect this to come through in the following 12-months as international travel resumes and pent up demand is released in to the market.
“The market continues to be driven by transactions on properties over £3m, and in particular the house market, with prime locations, such as Kensington, Chelsea and Notting Hill, outperforming the wider prime central London market, and these trends are likely to continue in 2022.”
The agency has also updated its five year forecast estimating price growth in the UK of between 20 and 35 per cent and in prime central London of between 15 and 35 per cent.