House price growth to slow in 2022 - Halifax
By Abigail Townsend
Date: Friday 17 Dec 2021
(Sharecast News) - Halifax is predicting flatter house price growth in 2022 following the bumper gains seen this year, but warned there remained considerable uncertainty around its forecast.
The mortgage lender said the housing market had continued to "defy expectations" in 2021, with property prices rising by 8.2% despite the pandemic.
The average price of a house in the UK is now £272,992 compared to £252,235 a year previously, while quarterly house price growth is 3.4%, the strongest level since 2006.
Halifax said the stamp duty holiday had helped to drive the market along with increased homeworking, which fuelled demand for bigger properties, record low interest rates and greater savings.
Looking to 2022, however, and Halifax said pressure on household budgets was likely to ramp up, as government support measures ended and interest rates rose.
Russell Galley, managing director, said this suggested house price growth would "slow considerably" in 2022.
But he continued: "Nevertheless, interest rates will remain low by historic standards and property prices will continue to be supported by the limited supply of available properties.
"We expect, therefore, that house prices will maintain their current strong levels but that growth will be broadly flat during 2022, perhaps somewhere in the range of 0% to 2%.
"Even with that range in mind, there is still a large degree of uncertainly around this forecast, particularly around the extent to which savings accrued during the pandemic continue to boost housing transactions and prices, and how lasting the recent shifts in housing preferences prove to be."
Galley also argued it was "prudent" to acknowledge that house prices could rise or even fall "by much greater margins" depending on how Covid-19 continued to impact the economy.
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