Britain’s housing market is to slow dramatically in 2022 as borrowing costs rise and household budgets come under mounting strain, property experts have predicted.
After a year of booming prices driven by stamp duty holidays across the UK and changes in the types of properties being bought and sold, forecasters typically suggest house price growth of between 3 and 5% next year.
The most recent figures from Nationwide building society showed annual price growth running at 10%.
In London’s wealthiest boroughs, however, price rises are expected to outstrip those recorded this year, and could beat the figure for the UK as a whole.
The property firm Savills said it expected growth of 6% in prime London neighbourhoods in 2022, up from 3.2% in 2021, but that renewed uncertainty over Covid could push that growth into later in the year.
Savills said prices had started to rise again for flats in prime areas, as people began to return to the city or looked for a pied-à-terre to use while there.
Frances Clacy, an associate director at Savills, said: “Activity levels have picked up significantly over recent months, but the renewed Covid-19 uncertainty adds an unwelcome additional layer of doubt that will likely push the expected bounce in values further into 2022.