UK house prices are predicted to surge by 5%, Rightmove said on Monday, as available stock of property for sale hits the lowest level per estate agency branch ever recorded by the property comparison website.
Seven out of 10 properties advertised on the portal are currently marked as ‘sold subject to contract’, compared with just two out of 10 back in 2012, underpinning its prediction of price growth, it said.
This comes as strong buyer demand is carrying forward into 2022, with November’s buyer numbers 41% up on "election-subdued" 2019, and still 3% up on “booming 2020.”
With two months of data yet to be reported, 2021 has already seen the highest level of completed home sales since 2007, and Rightmove expects 1.5 million for the full year.
Guy Robinson, head of residential agency at agent Strutt & Parker said: “Following the highest house price growth in seven years, the outlook remains positive for 2022. Buyer demand continues to be robust and applicant numbers are still significantly higher per property than any time since 2006."
While fully available stock for sale has hit a new record low this month, valuation requests from home-owners are 19% up on this time a year ago, suggesting more people will be making a New Year resolution to move, Rightmove said.
But it also said sellers’ pricing power will be impacted by increasingly stretched buyer affordability, and more buyer choice boosted by previously hesitant sellers now gearing up for a New Year move.
It added that following a frenzied 18 months due to people looking for space during the pandemic, it predicts a “closer to normal market” next year.
One sign of this is the continuation of the seasonal fall in the price of property coming to market, down by 0.7% (£2,234, $2,945) on the month, compared with a 0.6% fall this time a year ago.
“A rise in interest rates is likely next year, and whilst a rise is often regarded as unhelpful to the market, a slowing of the fast pace of sales, and associated pace of price rises, will help the return to more normality that will suit many movers," said Tim Bannister, Rightmove’s director of property data.
Being a ‘power buyer’, who has sold subject to contract or can buy without selling, has increasingly become a requirement this year, and this will still be the case in 2022, Rightmove said.
Proving access to funds, including a mortgage agreement in principle, is also becoming a must-have, not only to get higher up the buyer pecking order, but also to speed up the process.
“Those who have been working out their finances as part of getting sale-ready will obviously hope to achieve the highest possible price. However, despite high demand, buyers will have limits to what they can afford or are prepared to pay,” said Bannister.
Guy Gittins, CEO of Chestertons, said: “Demand has stayed at high levels in Q4 of this year when we would normally expect a seasonal market slowdown and, with plenty of unsatisfied buyer demand, we predict the market to remain buoyant into at least the first quarter of 2022.”
He said that as demand continues to exceed supply, Chestersons is foreseeing a strong sellers’ market and further price rises.
Already, the agent has seen a 30% drop in sellers willing to lower their asking prices.
Meanwhile, London’s property market is showing no signs of a seasonal slowdown as Chestertons registered a 12% uplift in buyer enquiries this November compared to the same month last year.
The agency saw a 6% decrease in the number of sales falling through, further indicating house hunters’ determination to close a deal this year.