In 2021, house prices throughout the nation soared while people’s desire to move saw the highest number of properties being sold since 2007. Now the big question that everyone’s asking is what does 2022 hold for the property market? If you’re looking to sell or buy a property in Shropshire, then read on to find out what we can expect from the year ahead.
Despite winter typically being a quieter time for the property market, the frenzy of activity we saw throughout 2021 continued right through to the end of the year. December saw a 10.8% increase in house prices compared to the previous year, bringing the average cost for a UK property up to £274,712.
However, Shropshire specifically saw an even greater annual increase of 13.3%. Despite this being an impressive rate of growth, the average price of property within the area was still below average at £261,545. Now according to Rightmove, January 2022 has continued in a similar fashion with the West Midlands seeing a 7.6% annual increase to £262,825.
The online property portal has also noted a 15% increase in buyer activity, which means properties are being snapped up quicker than ever. In February 2021, it took an average of 65 days for properties to sell in the West Midlands. By January 2022, this had almost halved, taking just 37 days for sellers to accept an offer.
One of the main reasons for higher prices and shorter sale times is a shortage in supply, with buyer demand far outstripping supply. This drove competition among buyers, with people acting quickly through fear of missing out and making offers well over asking prices.
However, like the rest of the UK, we have started to see an increase in seller activity, too. Our team are steadily carrying out more valuations, and we have had one of the busiest starts to the year in quite some time. In the first week of 2022, Rightmove noted a 44% increase in valuation requests compared to last year, and our own team has seen similar activity among those looking to sell properties in Shropshire.
With buyer demand remaining high and supply still low, the race between buyers is set to continue. However, it is looking less intense, and the increase in valuation requests means there could be a lot more options available in the coming months. As more properties enter the market, things will gradually calm and start returning to more normal conditions.
Rightmove has predicted that UK house prices will see an annual growth of 5% in 2022, and compared to the 13.3% increase we saw in December 2021, this suggests things are looking to slow down. One of the key reasons behind this is buyer affordability. The rise in house prices paired with concerns over increasing costs of living mean that people will simply struggle to afford properties if they continue to increase in value at the current rate.
However, compared to a rise of 1.6% in December 2019, this last year has seen one of the sharpest increases in house prices to date. The past year has been remarkable, and in the context of a more ‘normal’ market, a 5% increase is still high.
So if Rightmove’s estimate is accurate, then this is still very much the seller’s market. Based on the average house price, a 5% increase would mean a rise of £13,141, taking house prices in the West Midlands from £262,825 to £275,966.
Given that Shropshire ended the year with a 2.5% higher increase than the national average, we could even see rises of up to 7%. This could all be countered by buyer affordability, but given that the average cost of property in Shropshire is still less than the national average, it might be that we start seeing more people moving to our area from the bigger cities.
So, with everything in mind, what can buyers and sellers expect from the year ahead? While more sellers are entering the market, buyer demand is still high. This means that buyer demand still outstrips supply.
However, as sellers continue to enter the market and buyer affordability gets stretched to its limit, then we can expect the steep increase in house prices to slow down. Prices will continue to rise at a higher rate than more ‘normal’ markets, but this increase will be less than the last couple of years.
Everything points to a slow but steady return to more normal market conditions as buyer and seller activity starts to regain some balance.
Today’s property market is incredibly fast-paced and constantly changing. In Shropshire, house prices have risen much faster than in other areas of the UK, but still remain lower than average. With this in mind, it’s always a good idea to speak to local property specialists who are in the know about local trends.
Whether you’re looking to buy or sell, our team here at Coleman Estates are on hand to offer advice and help guide you through the current market. Although 2022 could still go either way, we have had a fantastic start to the year so far. More sellers are requesting valuations, and as the market heads towards its typical annual increase in activity, we expect it to be a wonderful year ahead for both buyers and sellers.
Back to news
