Last year was a momentous one for the UK housing market, boasting an extraordinary 11.8% annual rise in 2021, however, the question going into the new year was if the rise could continue into 2022. Recent news shows that house prices have seen the biggest rise for 20 years as the average price tag on a home grew by nearly £8,000 over the space of a month.

This jump in February represents the biggest month-on-month increase in more than 20 years. The average asking price in the UK now stands at a new record £348,804, representing an increase of nearly £40,000 in the previous two years. This is welcome news for the UK housing market as many advisors thought that the boom in the UK house prices was likely to end this year due to household finances becoming increasingly stretched, with raised interest rates and the end of the stamp duty holiday being major contributors to this, however the growth in the UK housing market continues.

London has particularly seen a big increase in popularity for home buyers with buyer demand being 16% higher than this time last year as workers are being encouraged to return to the office.

However, the increased demand of people choosing to purchase a property in rural areas continues, with research from Cornerstone tax showing that 10% of Brits have moved away from a city or urban area and 24% of Brits have seriously considered moving out of the city to a more rural area due to the pandemic in the past year. It has meant that supply is becoming increasingly short in rural areas as well as the increase demand of London properties, bidding wars have emerged and with research showing that March is the strongest month for competition between buyers in the UK housing market, this trends seems set to continue.

David Hannah, principal consultant at Cornerstone Tax, discusses the outlook of the 2022 rural and city property market:

“Last year was certainly a record-breaking one for the UK housing market and the increase in house prices has continued throughout 2022. The nearly £8,000 increase in average house prices is directly connected to the ever-increasing demand of property from buyers, but an ever-decreasing shortage of supply of available properties on the market.

“A category of buyers who find themselves in need of more space and are now ready to move on from their first homes are driving this recent increase in average house prices. A solution to the global supply issues will cause an increased supply of new builds, providing the UK housing market with some much-needed extra stock, which should subsequently decrease the average UK house prices, but there are many obstacles facing the UK housing market now which has caused a lot of uncertainty”