From the ‘race for space’ to the return of the capital and demand for rental property, 2021 was the year homeowners and home seekers sought out a change of lifestyle.
How is 2022 shaping up? Knight Frank Finance experts give their views on the big trends that will shape the year ahead, from mortgage rates to new homes and buy to let.
Simon Gammon, Managing Partner, Knight Frank Finance, said:
“By raising the base rate it’s clear that the Bank of England believes the economy will shrug off most of the effects of Omicron. Getting a grip on rising inflation appears to be the number one priority. Mortgage rates on the high street have been edging upwards during recent weeks in anticipation of this moment and it’s clear the lenders believe there could be at least one more hike in the base rate next year.
“Though mortgage rates have been rising, they remain very competitive by historic standards. Our advice to borrowers is to get an offer locked in now. They are often valid for six months and can easily be amended should it be possible to lock in more favourable deal at a later date.”
Hina Bhudia, Partner, The Private Office, Knight Frank Finance:
“Buyers are back out in force in the capital. The number of offers accepted in November reached a ten-year high. Meanwhile, the largest increases in the number of new prospective buyers registering – a leading indicator of future activity - were all in the capital during the three months to November.
“Early 2022 is set to be extremely busy, but supply remains tight. There are currently about eight prospective buyers registered for every property listed in Prime Central London. In this ultra-competitive environment, the right financing can make the difference between securing your dream home and missing the opportunity." *
*Data sourced from Knight Frank
Nathan Bakhbakhi, Associate, New Homes, Knight Frank Finance
“Buyers are displaying renewed confidence in London’s new homes market. Developers sold more homes during Q3 2021 than any period during the past twelve months*. The sales environment has been improving steadily and developers have accelerated projects to meet demand.
“Recently we’ve witnessed some of the market’s most popular launches in recent years, including The Auria, Arden and London Square Greenwich. Whether you’d like to purchase through one of the Government’s new-build schemes such as Help to Buy or feel you could benefit from a bespoke arrangement, get in touch to see what’s possible. We have direct relationships with the capital’s biggest developers and access to all the lenders active in the market.”
*Data from Molior
Andrew Johnson, Sales Manager, Knight Frank Finance
“A shortage of rental properties has transformed the buy-to-let proposition for prospective landlords. Rents across UK cities are now climbing at their fastest pace for 13 years* and it takes an average 15 days to let a property in the current market. Households seeking flexibility, returning city workers and students are all fuelling demand.
“The shifting tax and regulatory landscape led the buy-to-let sector to contract in recent years, but with the right property and optimal financing in place, a buy-to-let property could be a fantastic source of alternative income in 2022. Whether you’re a seasoned landlord, considering returning to the sector or are weighing up the prospect of securing an alternative income, get in touch for some expert advice.”
*Data from Zoopla
David Forsdyke, Head of Later Life Finance, Knight Frank Finance
“More than 20,000 new and returning customers opted for Equity Release to access property wealthy during the second quarter* and volumes are now approaching levels not seen since the onset of the pandemic. We anticipate a significant pick-up in activity once the prevailing economic uncertainty subsides.
“Demand is particularly strong among the high-net-worth community, whether directly or via their financial advisors. A growing number of advisors now view Equity Release as a vital tool in inheritance and tax planning.”
*Data from the Equity Release Council
If you, a family member or friend is looking to buy a property and would like to discuss the options when it comes to securing a mortgage, speak to us. We know all the major lenders in the marketplace and can help find the most cost-effective and suitable mortgage for you.