Despite all the obvious difficulties and challenges we experienced during 2021, we are both proud and thankful to have had the year we have. We broke sales records (number of sales agreed), received multiple industry leading awards (8 in total and counting) and retained our 5-star customer service rating (on feefo). We couldn’t have accomplished any of this without all the hard work of our amazing team and the trust put in us by our many amazing clients, both new and old.
As we enter a New Year, you will be forgiven for checking which year it is that is about to get underway! The past 18/24 months have been a bit of a blur, and just as things were moving towards a more recognisable ‘normal’, the latest Omicron variant pumped the breaks. It is too early to know what, or for how long, the full impact will be, or indeed what the future holds, but hopefully this is a short-lived bump in the road and as we move out of the winter months, we continue on the road to recovery.
Before we go any further, we hope that you and your loved ones have had a relaxed and enjoyable festive period and we wish you and yours health, wealth, peace and prosperity for 2022 and beyond, we look forward to speaking to and seeing (some of you) in the near future.
Snapshot; what we expect to see in the SE16, and surrounding areas, sales market in 2022….
If nothing else, the last year or so has reminded us that it is impossible to predict the future, so it really is difficult without a crystal ball! However, despite activity in the majority of markets grinding to a halt, the housing market has been frantic, proving that despite what happens, there will always be an overwhelming desire to not just own a property, but to live in a ‘home’, ideally one which meets as many needs and wants as we can afford. The pandemic has not only further cemented this fact, but for many, allowed or forced, the wants and needs to be reassessed. In line with the majority of the nation, the sales market in SE16 over the past 18 months, since the easing of lockdown restrictions, has been a frantic one and we expect this trend to continue, just at a little less frantic pace.
Q1 will welcomely see an increase in sales stock. New listings are typically 50% higher at the end of January compared to the beginning of December, and we already have properties scheduled to come to market early in the new year, as well as have a number of sellers/properties primmed and ready to go live as soon as either we advise the market is ‘hot’ enough, or when the sellers are ready to progress with a move.
During 2021 we received record numbers of enquiries from potential sellers planning to make a move in 2022, and so have numerous calls and valuations lined up for the new year, which we expect to result in properties coming to market.
Buyer demand will continue to be high in Q1. ‘New Year, New Home’ movers (buyers and sellers) will enter the market, we expect this to be turbo charged this year due to the pandemic as we continue to see people further working out what their ‘new normal’ needs and wants are.
Despite the expected demand from buyers, sellers MUST be careful not to get too excited and over price, especially as we expect to see more competition from fellow sellers, and there is a possibility of the market burning out a little as the most serious buyers act and buy the most saleable and/or aggressively priced properties. You never want your property to be the one always sat on the shelf! If selling and onward buying in the same market, you also don’t want to restrict your buying options (position) by not being able to sell due to overpricing, a buyer who is unincumbered is always preferable and likely favoured.
Sellers should be careful not to base your decision on who (which agency) to list with purely on valuation figure and/or fees. Of course we all want to sell at as higher price and in an as quick time as possible, but you should also prioritise using an agent who has history, knowledge, and a proven track record in the area you are selling. Marketing at the right price with the right agent can take a great deal of stress out of a, more often than not, very stressful situation as well as likely find a buyer at the right price in a reasonable timescale.
Due to changes in taxation and ongoing increasing regulations and legislation, we are likely to see the continuation of Landlords selling/exiting the market, which we have seen over the past few years. We also expect to see low level of Landlords (new or existing) buying, unless the government realises the necessity of the PRS (private rented sector), especially in order to keep rents affordable. The planned changes to Energy Efficiency and property licensing will likely tip more landlords over the edge to sell than give motivation to buy. Hopefully the government will make changes and/or incentives (to buy rather than sell) to counter this trend, unless of course this is their desired intention.
We expect to see more foreign investors returning to the UK as the pandemic (hopefully) eases, or at least is contained, controlled and managed and seen more as a ‘normal’ way of life in the post coronavirus world. We hope that travel restrictions ease, which will help revive the foreign investor market and that taxation changes don’t act as too much of a deterrent.
As the significant ‘Canada Water Master Plan’ (Canada Water Masterplan | British Land) develops and starts to take physical shape, it is likely to increase the awareness and reputation of SE16 and lead to more buyers and investors considering the area.
Depending on how long the buyer demand continues, we could see supply pipelines build, after the busy early year market, as the market normalises. If so, this will likely ease the upward momentum on pricing. Alongside this, next year will likely mark the emergence of economic headwinds as the rising cost of living, and potentially mortgages, impacts household finances.
All in all, we expect to see demand remain high (during the early months of the year especially), supply to increase, and asking prices (although property specific) to remain strong. We hope the conveyancing process eases and the time taken from ‘agreed to completion’ returns to ‘normal’ and expect the interest rate and financial changes to play a secondary role (for many) to the desire to move as buyers and sellers prioritise moving based on what they need and want in their new normal.
If you have any questions on what 2022 may hold for the housing market in and around SE16, would like to speak to one of our 5 star rated multi award winning agents, or want to know what your property is currently worth and when may be the best time to sell, please do reach out and we will do all we can to help.
0207 231 0002, welcome@living-london.net
A more detailed insight; what we expect to see in the SE16, and surrounding areas, sales market in 2022…
Before attempting to offer a prediction of what the sales market in and around SE16 will look like, we take a quick recap over the recent factors which have shaped the (general) market.
Summer of 2019; annual house price growth was running at the lowest rate of growth since 2013, when the market (and the economy) was still recovering from the global financial crisis. One of the factors causing this low rate of price growth was the uncertainty around Brexit, which acted as a brake on activity and prices.
July election 2019, and as importantly the December 2019 General Election, was a turning point…a new leader with a sizeable majority meant it was now easier for the government to be decisive, particularly surrounding Brexit. The housing market reacted positively.
Q1 2020; just as the (significant) pent up demand, from buyers and sellers, in the housing market started to flow and the flood gates had opened, the pandemic emerged and the first lockdown announced. There were fears that the nascent housing market activity would be curbed as a result.
Instead, we have seen one of the busiest 18-month periods in the housing market in more than a decade.
A combination of the releasing of pent-up demand (from the delays surrounding Brexit and now the pandemic lock down), the pandemic-led ‘reassessment’ of what people need and want from a home (with households deciding they want to live in a different space or location), and (the tax break from) the stamp duty holiday, resulted in around one in 16 homes changing hands in 2021. Although the aforementioned increased both supply and demand, demand outweighed supply and as such caused a tightening of stock levels, in turn putting upward pressure on pricing.
While the stamp duty holiday ended (after an initial extension), demand from purchasers remained high, suggesting that the ‘reassessment’ has further to run in 2022, likely as many are still fully unsure of and working out what their ‘new normal’ is yet, especially in light of the latest strain.
While the annual rate of house price growth was elevated throughout 2021, the rate of the Q4 quarterly growth started to ease, suggesting that house price growth may start to moderate, although this is unlikely to be a linear progression and will (as always) vary between locations and properties.
As we moved closer to Christmas, we experienced a fall in activity and agreed sales, which is in line with seasonal trends, but this was more to do with a lack of saleable stock rather than lack of desire from buyers. We did see more and more buyers try to capitalise on the slowing market by chancing their arm, some sellers were responsive, others preferred to wait. We expect buyer demand to climb again as we move into Q1 next year.
As happens seasonally around the Christmas & New Year period, the pandemic allowed for a prolonged period for people to reflect on their lives. For many this meant reviewing what they want and need from a ‘home’. This pandemic inspired movement, as well as the stamp duty holiday, encouraged many movers to bring their plans forward. With working from home becoming more and more common and normal, many people decided that close proximity to work was now further down the list of priorities, replaced by the need to have space to work from home, space to live and breathe, outside space and proximity to friends and family.
So what will the housing market look like in 2022?
As in every marketplace, although there are universal trends, there will always be market variations based on location and property type. Certain properties are always more in demand and saleable than others. Space; to work from home, space; to live and breathe and space; outside space, were order of the day and on the wish lists of those who could afford it during the pandemic. Properties which were presented well, or if not price adjusted to counter, all came and went during 2021, this (as always) will continue to be the case in 2022 and beyond.
Rightmove released its latest house price forecast, based on a predictive model that uses millions of supply, demand and pricing data points across the property market, along with insights from a panel of so-called experts. The property portal predicts that the national average price of property coming to market will increase by 5% in 2022, as strong buyer demand and a historically low level of available property continue to push up prices.
Rightmove forecasts that the London market will continue to improve, albeit from a lower base of activity and price rises than the rest of the country, with a more muted rate of 3% growth.
December saw the Bank of England increase interest rates for the first time in over three years to tackle rising inflation which stands at 5.1%. The increase, from 0.1% to 0.25% was expected but some thought the Omicron variant would delay this rise until the new year.
Banks and building societies had already factored this rise into the products they are offering weeks in advance of the announcement. Despite the increase in rates movers will still benefit from good mortgage availability and attractive rates even if base rates further rise (within reason). Even with several quarter point interest rate rises, mortgages will remain relatively low compared to longer-term norms, and the fact that many homeowners with mortgages are on fixed rates will shelter parts of the market from any immediate impact. Everyone will feel the impact to varying degrees, but we don’t see it derailing plans for many.
Omicron brings further uncertainty and as more and more people were starting to return to work, or at least contemplate it, this creates further delays and further uncertainty. We still expect those who were steadfast on returning to a ‘traditional’ physical/onsite way of working to do so, but it may sway those who were 50/50 to at least hold fire on making a decision for now. As such this may delay a % of buyers and sellers to take action until they have more of a concrete idea of what their new normal looks like work wise.
All in all, we expect to see demand remain high (during the early months of the year especially), supply to increase, and asking prices (although property specific) to remain strong. We hope the conveyancing process eases and the time taken from ‘agreed to completion’ returns to ‘normal’ and expect the interest rate and financial changes to play a secondary role to the desire to move as buyers and sellers prioritise moving based on what they need and want in their new normal.
If you have any questions on what 2022 may hold for the housing market in and around SE16, would like to speak to one of our 5 star rated multi award winning agents, or want to know what your property is currently worth and when may be the best time to sell, please do reach out and we will do all we can to help.
0207 231 0002
020 7231 0002
welcome@living-london.net
