Due to a higher borrowing cost, national growth is forecast to from from 10% to 3-5%.
As borrowing costs rise and household budgets come under rising strain, property experts predict the UK’s housing market to slow dramatically.
The stamp duty holidays drove a year of booming prices across the UK as well as changes in the types of properties being bought. Nationwides building society showed annual price growth running at 10%, in their most recent figures, but forecasters predict that this could more than half to between 3 and 5% in 2022.
Mortgage lenders, Halifax, said it expected price growth to slow considerably as a result of rising living costs. The prices growth increase in 2020 was 6%, in 2021 it was 8%, however, Halifax have forecast a significantly smaller price growth of between zero and 2%. It estimated the average house price in December at £272,992, almost £34,000 higher than at the start of the pandemic.
The property website Rightmove has predicted house prices will rise by 5% nationally and 3% in London. Zoopla, a rival site, expects 3% next year and forecast 1.2m transactions, down from 1.5m in 2021 but in line with the average number of transactions over the last five years.
Robert Gardner, the chief economist at Nationwide building society, said: “The outlook remains extremely uncertain. The strength of the market surprised us all in 2021 and could do so again next year.”