LONDON – Asking prices for British residential property are likely to rise by 5% next year, but London looks set to underperform the national trend, the country’s largest property website, Rightmove, forecast on Wednesday.
British property prices surged through most of last year’s lockdown and for much of this year, in common with many other big economies, bolstered by increased demand for space as people worked from home as well as a tax break on purchases.
“The net result as we approach the start of the 2022 market is the lowest ever available stock of property for sale per estate agency branch, yet with ongoing high buyer demand,” Tim Bannister, Rightmove’s director of property data, said.
The latest official data shows that British house prices rose by 11.8% in the year to September, only just below a peak of 12.6% in June which was the highest in more than 15 years.
Rightmove said it expected price rises to slow next year as housing became increasingly hard to afford, both because of recent house price increases and a wider squeeze on households’ disposable income.
Consumer price inflation is already at a 10-year high, the Bank of England is widely expected to start raising interest rates either this month or early next year, and payroll taxes for workers and employers increase in April.
Rightmove said it expected price rises to be greatest in areas away from London such as southwest and central England and Scotland, where prices were lower than in the capital and some areas had benefited from relocation by remote workers.