‘Uncertainty’ is still the key word that will influence the rural and city property market in 2022, a tax expert has said. David Hannah, principal consultant at Cornerstone Tax, said: “There are still many uncertainties in the UK housing market as we head into 2022.
“One of the predominant problems being the current supply within the UK housing market. Rural properties in the sub £2.5m bracket are in very, very short supply. Indeed, houses in the £200,000 to £750,000 bracket, in or on the edge of villages in the countryside, are all being sold. This has caused estate agents to complain about the lack of stock.
“The disruption to the global supply chain (caused by the pandemic and the closure of the Suez Canal) continues. There is still a shortage of building materials. This has caused delays in the commencement and, indeed, the completion of many residential housing projects. Most new developments (particularly those outside cities) are already selling off-plan, even with completion dates as late as May 2022.
“This shows a sign of an increased and, I think, persistent tendency to want a property with gardens, near open spaces and countryside. Demand for inner-city apartments has started to increase. Interestingly, that may not be a post-pandemic effect, but rather a geo-economic effect.
“The tendency to work from home, or work from anywhere, appears to be persistent. With the consequent effect on commercial infrastructure, the question has got to be: What is going to happen to all that vacant office space? Is it going to be converted into new homes using permitted development? Will this trend accelerate? It’s been very popular over the last few years as a way of regenerating urban centres, former warehousing, industrial, retail, hotels and offices, and I think it will. This may, on and of itself, provide a further economic stimulus to this country.
“The imbalance between supply and demand has, inevitably, raised the average UK house price. We saw a 0.9 increase in November, taking the average UK house price, which now stands at £272,992, to a new high. It is unclear whether the average UK house price will continue to climb throughout 2022, as we have seen in 2021.
“A solution to the global supply issue will cause an increased supply of new builds, providing the UK housing market with some much-needed extra stock, which should subsequently decrease the average UK house prices. But there are many obstacles facing the UK housing market now, which has caused a lot of uncertainty.”
