HOUSE prices went through the roof last year, but property expert Nicholas Mendes explains whether they'll finally drop in 2022.
The stamp duty holiday, which rolled out over the first Covid lockdown and ended in summer last year, meant buyers could get a home without paying the hefty tax.
It meant Brits faced a race against time to bag a property before the deadline ended, causing demand for homes to surge and prices to rocket as a result.
A lack of homes on the market helped to boost prices even further.
But with a cost of living crunch leaving families strapped for cash, saving for a property has never been harder.
Will this mean demand for homes goes down, and house prices along with it? Broker firm John Charcol mortgage technical manager Nicholas Mendes explains all you need to know.
Mr Mendes has been in the property industry for 15 years advising home buyers on mortgages.
While plenty of Brits were priced out of buying a house last year, he explains whether the market will cool in 2022.
Will house prices go down in 2022?
Mr Mendes said that while he expects to see a slow down in house price growth this year – rather than a fall.
Most read in Money
Wetherspoons hikes price of a pint at all pubs across the UK
Martin Lewis warns energy bill rise means some Brits will 'starve or freeze'
Universal Credit claimants warned benefit payment date could change next month
We tested supermarket beans versus Heinz – but which brand came out on top?
One of the reasons Mr Mendes thinks a slow down is on the cards is because of expected rising interest rates.
Experts say the Bank of England's base rate could reach 2% this year – the highest since 2009.
It means the amount of interest you'll be paying on tracker or variable mortgages will go up.
Lenders will take rising rates into account when assessing whether you are able to afford a mortgage or not.
It means it could be tougher for you to get a mortgage – and that could leave people in a position to buy, reducing the demand for homes, which could take the accelerator off house price growth, Mr Mendes said.
What could average house prices stand at?
Taking this into account, Mr Mendes estimates house prices could increase by 3-5% by the end of the year.
That's a much slower rate compared to last year. According to Nationwide figures, house price growth surged at 10.4% in December 2021 – house prices haven't grown that much since 2006.
"With the average house price at £260,000 in 2021, a 5% increase would add £13,000, bringing the average to £273,000 by the end of the year," Mr Mendes said.
Should I buy?
House prices can go up and down easily, so it's hard to know when the best time to buy is.
But Mr Mendes advises that if you can afford it, then its worth investing in a home.
Read More on The Sun
Russian Abramovich romantically linked to actress, 25, with Ukrainian roots
Stephen Mulhern forced off TV after needing hospital treatment
"Look at the longer term picture – buying a house will always be good investment, because although the market will dip at points, prices will go up over the long-term," he said.
"But make sure you can afford taking on a mortgage, keeping in mind base rate rises and the ongoing cost of living crisis."
We pay for your stories!
Do you have a story for The Sun Online Money team?
Email us at [email protected]
Source: Read Full Article