What will happen to St Neots house prices in 2022?
Traditionally, if you had not sold your St Neots home by the first week in November, you would normally have to wait for the famous Boxing Day rush on the portals (Rightmove, Zoopla etc) to get potential buyers interested. Is that still the case though?
Over the last two years, we've seen that the various lockdowns have caused a surge in house buying right up until when the Christmas edition of the Radio Times goes on sale (and beyond)!
That’s left a lot of St Neots sellers and buy-to-let landlords asking us if they should put their St Neots home on the market in January or wait until later in the summer? And buyers are wondering if they’re about to buy a home just before a potential property crash?
What is going to happen to St Neots house prices in 2022?
We can’t answer that with certainty but knowing St Neots and the property market like we do, we can give it a good go! And we don’t think it’s doom and gloom
The best place to start is looking at 2021 so there’s some context to what might happen in 2022. Whilst the final numbers won’t be known until Easter 2022, it is estimated that in 2021, one in fifteen privately owned homes in the UK are expected to have changed hands, being the busiest year in the last 14 years.
So far in St Neots, 611 properties have changed hands in the last year.
That figure, however, is only up to October 2021, so numbers will be much higher once all the final counts are in by March/April.
The pandemic made many St Neots families re-evaluate what they wanted from their home, with many wanting bigger rooms and more of them! Many in the press dubbed this ‘the race for space’, meaning the property market was flooded with home buyers, most bringing forward the home move they had planned between now and 2025.
The issue was, there weren’t enough properties on the St Neots market to satisfy every buyer, meaning our house prices have unsurprisingly been driven up.
The average price of a home today in St Neots is £330,900
Although it is still premature to know what will happen in 2022, most property commentators seem assured that we are not heading towards a house price crash, mainly due to one reason.
There aren’t enough properties on the market in St Neots. Simple supply and demand economics!
The property crash in 2008 was caused by everyone dumping their property on the market.
In January 2007, there were 420 properties for sale in St Neots, one year later in January 2008, that had risen to 721 properties, whilst today, that stands at 123
And we can’t see that changing for 2022.
In 2007, mortgage interest rates were 6.5% to 7.5%, so when the economy started to falter, everyone looked to sell their homes to reduce their outgoings as unemployment rose by over 60% in just a couple of years. This time round most people have mortgage rates of around 2% to 2.5% and unemployment is dropping, meaning they don’t need to sell their home.
The stamp duty tax holiday came to an end months ago, and Bank of England base interest rates are expected to rise moderately in the coming year, yet not to the level they were in 2007 (5.75%).
Nonetheless, demand for St Neots homes will still be there. We have even read some reports suggesting that more than 20% of British households are seriously thinking of moving between now and the summer of 2023.
It’s also probably because, as a country, we think we may need to work from home each winter for the foreseeable future because of new variants like Omicron, which will cement the need for people wanting to move home for remote working. It might be that St Neots buyers are looking for a dedicated office at home or that they feel they now no longer need to be in large built-up areas that are near to their work.
This will probably support St Neots house prices whilst demand continues to exceed supply.
St Neots house prices will be 4.3% higher by the end of 2022
This increase in St Neots house prices is expected to entice even more St Neots house sellers onto the market, which will steady our house prices slightly but may still not satisfy the demand.
What about the St Neots rental market?
Rents tend to grow in line with tenants’ wages. So, with many people getting decent pay rises and not enough properties being built, many economists are suggesting rents will be 14% to 19% higher by 2027. Even with the house price growth, the numbers for rental investments still look rosy.
Is it the right time to buy your first property in St Neots?
This rise in St Neots house prices has had many people asking whether 2022 is the right time to buy their first home? Should they buy now before St Neots prices rocket even further or delay in the hope that house prices come back down?
As with any important decision in life, this will mainly depend on your personal circumstances and your motives for wanting to move.
If the St Neots home that you want to buy is on the market, available and you can afford the mortgage, then delaying could be detrimental. It’s like holding off for the ‘next generation TV’, it then coming out; then just as you are about to buy the TV, the next ‘next generation TV’ gets announced for six months’ time ... and the cycle is constantly in motion – so you end up never buying a TV … just like you will never buy your own home!
Buying property is for the long-term
Sometimes you just have to make your decision, get something bought and start the journey of the next 25 to 35 years of living in your family home whilst paying off your mortgage.
The present low interest rates for first-time buyers means that there are some very low mortgage deals available for those with a decent deposit, making it a good time to buy a St Neots property, especially if you fix the interest rate.
If your deposit is humbler, the Government’s 5% deposit mortgage guarantee scheme will still enable you to buy a property, albeit at a slightly higher interest rate.
The bigger picture
These are only our thoughts on predictions that may or may not come true. If inflation doesn’t get too out of hand and interest rates don’t go above 2% to 3%, it looks like St Neots house prices will, for 2022 and a few years beyond, continue upwards albeit with a slower trajectory than 2020/21 and probably with a few short, sharp up and down spikes on the way.
The bottom line is, ensure that any St Neots house move that you intend to make is something that you can afford, allow for future rises in interest rates and make plans for as many eventualities as possible. Do that, and you should be just fine.
What do you think? If you want to discuss this article or others, please get in contact.