London Property Market 2022
Post-Pandemic Property Boom & Interest Rates
London’s rental and sales market is set to become more competitive this year, with demand increasing again. A record high was recorded in January for all property types across the UK, as buyers and renters search for both flats and houses.
After a long period of remote working, the easing of lockdown restrictions shows a significant shift in the rental market. Tenants returning to the office has triggered strong rental growth. Corporates and international students are returning in their droves, keen to resume their careers, and the appeal of London’s vibrant theatres, restaurants and bars has been irresistible.
This growth is expected to continue throughout 2022 and with such high demand, shortages of good rental properties will remain a challenge.
As offices re-open, demand is flowing back into city centres.
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Sales property demand has also soared over the last couple of months compared to the previous 4 years, which is comparable to the jump seen following the stamp duty holiday.
This could have been spurred on by some buyers keen to lock in a home loan whilst the interest rates remain low.
But with many economic factors shaping the housing market, including the limited shelf life of ‘the race for space’, the latest announcement from The Bank of England raising UK interest rates from 0.25% to 0.5%, and ever rising living costs, here’s hoping for a continued but temperate house price growth.
Tim Bannister, Rightmove’s director of property data, commented: “The level of demand we’re seeing from home buyers at the start of the year suggests the rise in interest rates is unlikely to dampen the motivation to move. We’ve seen a real desire from both sellers and buyers to take action and move at the start of this year, and this is likely to outweigh the impact of an interest rate rise on house prices, at least in the short term. For those looking to buy a first home, it’s important to remember that interest rates are still at a level well below historic norms, and there are still many competitive mortgage products out there.”