What is the outlook for UK mortgages in 2022?


Whether you are looking to invest, remortgage or purchase your first home, with changes in inflation and interest rates, many are considering the outlook for the property market in 2022 and if it is the right time to buy. With the hope of a better economic situation in view, how will this affect the property market? In this article, we will look at what happened in 2021 and consider the forecast for the UK property market. 

What happened to the property market in 2021?

Contrary to predictions, 2021 saw an increase in home sales in the UK, with more homes sold in 2021 than in the previous 14 years. One of the reasons for the increased activity in the property market has been the stamp duty holiday announced in July 2020. This stamp duty holiday, which meant that no stamp duty was charged on the first £500,000 of a property purchase, was put in place last year. The scaling back of the stamp duty holiday began on June 2021, leading to a predicted reduction in property sales. Another factor leading to increased home sales in 2021 was the change in people’s preferences. With changing lifestyles and more people wanting remote working and studying spaces, there was a massive increase in demand for bigger homes as well as second homes. 

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What is the property market forecast for 2022?

October saw an end of the stamp duty holiday rates. With this massive change to stamp duty charges, it is predicted that there will be fewer property sales in 2022 than in 2021. However, the prediction is that there will still be plenty of activity on the property market in 2022. The forecast is that first time home buyers will have better rates in the next year. It is also forecast that interests rates could increase with inflation expected to rise, meaning home loans will be more expensive overall. When deciding if 2022 is the right time to buy, it is best to do as much research as possible in advance. Now is a great time to do your homework and check out interest rates and fees. You can easily compare mortgage rates and deals with a mortgage advisor like Trussle. Whether you are looking for a new mortgage or remortgaging, an online mortgage broker will compare the latest average house prices in the UK and get a mortgage decision within five days.

Source: Pixabay

In summary

In recent years, we have made considerable changes in how we live and work. It doesn’t look like the demand for more home office space, and outdoor green space is set to slow down any time soon. The long-term forecast is a growth of 3% in 2023 and 2.5% in 2024 for the UK property market. Mortgages may become more expensive if rates rise. However, a change in interest rates is hoped to be gradual and slight. Now may be a good time to shop around, use a mortgage comparison tool and quickly see what fixed-rate or remortgage options are available today.