Thinking about moving home next year? The experts at Samuel Phillips Law break down how the property market has changed for 2022
SPL’s Head of Residential Property, Helen Griffiths, gives us the low-down on what we should really know before we buy or sell our house.
What has characterised the property market of 2021?
Following the lockdowns of 2020 and 2021, there was a significant drive for home movers to find properties with more space – both in terms of office space for home working, and outside space to relax in.
The availability of flexible working and working from home meant that some home owners were looking to move away from city centres, as they no longer faced commutes into the office. These desires, coupled with the Stamp Duty Holiday and availability of lower interest rates, meant it was the perfect opportunity for those thinking about a change in location to ‘get moving’.
What’s the property forecast for 2022?
We expect to see the rush of buying and selling properties tapering off as the Stamp Duty Holiday has come to an end, although interest still appears to be high at present. Overall, the outlook for 2022 remains positive compared to previous years, but this could be influenced by potential changes to the Bank of England Base Rate, which may have an effect on the availability and affordability of mortgage products.
What are the pros and cons about moving home in 2022?
Mortgage interest rates are still low, so moving early in 2022 could see a benefit from fixed-term products. However, the potential change to the Base Rate could impact future affordability, so buyers should think very carefully about their long-term plans and financial position.
Have any new initiatives been created for 2022 to help first-time buyers or those from lower-income backgrounds get on the property ladder?
The Autumn Budget earmarked £24 billion for housing, including £11.5 billion for affordable homes. There are many schemes currently available and which will continue to be available next year, such as:
- The Help to Buy Equity Loan scheme – the Government will provide a loan for up to 20% of the purchase price (40% in London), and repayments don’t start until the 6th year.
- Shared Ownership – you will purchase a percentage of the property and the seller/developer will keep the remaining share. Further shares can be purchased at a later date as and when funds are available.
- The Mortgage Guarantee Scheme – this benefits buyers with lower deposits, as the lender is supported in offering a higher loan-to-value rate, i.e. a 95% mortgage.
- First Homes – this scheme benefits local first-time buyers, i.e. someone who has local connections and/or key worker status. The properties are offered at a discounted price, making them more affordable for the local community.
Do you expect schemes like these to be more or less attractive for house hunters in 2022?
I expect that incentives and schemes like shared ownership will become more popular, as those who are eager to get onto the property ladder can potentially purchase their ‘forever home’ but can build up their share in that property over time, as and when they can afford it.
What should 2022 buyers and/or sellers have in place before they set the ball rolling?
Sellers need to have their paperwork ready to provide. For example, we always ask for copies of guarantees or warranties for properties and/or planning/building regulation consents for works carried out to the property. It would be prudent for prospective sellers to obtain all necessary paperwork ready to provide to their solicitor at the outset, as this will reduce the number of enquiries raised by the buyer.
Buyers need to have their finances in place as soon as possible. Obtaining a decision in principle from a mortgage lender is a must to avoid any delays further down the line. If the buyer wishes to carry out a survey, we would also recommend that this is done at an early stage – so if there are any points that require investigation, they can be dealt with at the outset.
Need some more advice before you buy or sell your house? Samuel Phillips can offer initial advice in the strictest of confidence. For more information, visit their website or Facebook page or call the firm on 0191 232 8451