Property market predictions – what’s in store for 2022?

By Steve Chipp, Director at Town & Country Property Services

Making predictions in today’s turbulent and unpredictable world?

You might think I’m brave –  or mad –  but I’m going to give it a go.

Forecasting is never easy and I’ve long since traded in my crystal ball.  As a lettings agent, I obviously have a vested interest but the property market is always a good barometer of how the economy is faring. 

Along with other hot topics, it’s frequently a political football, with repeated calls for greater regulation and legislative change.

It remains to be seen if the Government will view professional landlords as an increasingly useful “money tree”, via ramped-up taxation, to help plug financial deficits post Covid. 

Likewise, we need to factor in the  economic headwinds that might have a major impact on people’s ability to rent or buy locally.

Expected hikes in historically-low interest rates, coupled with the highest inflation rates for nearly 30 years, is bound to take its toll, along with spiralling gas and electricity prices and general uncertainty about a post-pandemic world.

Looking at all this in more detail, I‘m going to stick my head above the parapet, so here goes:

Residential sales – Brighton remained the most profitable buy-to-let location in the UK for a second year running during 2021, according to CIA Landlords’ research. This keeps property prices buoyant, as people continue to move to the coast.

So why is Brighton – and neighbouring Hove – so popular and will the trend continue this year?

I’d be inclined to say a resounding “Yes”, with tenants lining up for rental property the minute it becomes available and up to 20 people competing for the same flat or house.

Inevitably, that will drive up rents and may encourage tenants to look elsewhere, but will they?

Part of Brighton and Hove’s appeal is obvious – a fashionable seaside location, quick and easy rail links to London, good schools, and large student population. There’s no sign of demand abating and I expect this to continue throughout 2022.

Changes to the law? I’m often asked if I’d support greater regulation within our industry.

The need for responsible and proactive letting agents has never been more vital, particularly during periods of high demand and low supply.

However, I doubt that Home Buying and Selling Reform will happen just yet, despite the need to make it easier for all parties.

There was extensive work by the Regulation of Property Agents (RoPA) working group back in 2019 but its recommendations were put on ice as the pandemic hit.

Given the distractions facing the Government currently, I doubt it’s top priority, despite some positive developments focused on clarity of information and digitalisation. Interested to know more? Check out the following link: Regulation of Property Agents (RoPA) | Propertymark

The Renters’ Reform Bill is also a hot topic amid fears that it’s been kicked into the long grass, at least for the time being.

In order to get things moving, the Government needs to issue its long-awaited White Paper, delayed from last Autumn to an unspecified date this year. 

Nothing can happen until it’s gone before Parliament and it’s bound to spark controversy, however the detail looks. 

Here’s a quick overview of what it’s likely to include: 

• removing Section 21 (relating to no-fault evictions) from the Housing Act 1988 and replacing it with a more comprehensive Section 8 (focused on mandatory grounds for repossession). 

• introducing lifetime deposits for tenants to cut the cost of moving between rented properties.

• Ensuring that the “rogue” letting agents and landlords database is publicly accessible.

Most industry pundits are now predicting it won’t get onto the statute books until next year. 

For some landlords and letting agents this may come as a relief but many of us are frustrated by the lack of real progress and would welcome some clarity either way.

Changes in the pipeline – there’s also a rake of other issues dominating discussions, including the following trends:

• Could “lets with pets” become the norm? Previously, only 7% of landlords were pet-friendly. For more information, see my recent blog: Making it easier to rent and keep a pet – Brighton and Hove Property News (brightonhoveproperty.news)

• An increase in “green mortgages” as the UK increasingly focuses on climate change and energy efficiency. In a nutshell, this incentivises landlords and property owners to “become greener”.

• Changes to carbon monoxide detector rules,  requiring landlords to install detectors in all homes with fixed appliances, including gas-fired boilers and fires. 

 So, we shall see. Hopefully, I’ve got at least some of this right, and the world will have settled down by the end of the year, as we “learn to live with Covid”. However it pans out, please bear in mind it’s only my personal opinion and little is set in stone.

Here’s to a happy, successful and healthy 2022 for landlords, letting agents and tenants alike! 

www.brightonlettings.co.uk