There are a number of factors that make predicting the property market for 2022 more difficult than usual, or as some have indicated, basically impossible. These include the overarching effects of the pandemic, the changes nationwide in some wage scales, and rising prices in some key areas.
However, for those living in rented accommodation, those factors are likely to cause a similar increase in rent to any increases experienced by those looking to buy a home, so that potentially the way you buy your home is the more important question, rather than whether or not you should be buying at all if you can afford to.
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Potentially rising prices and interest rates make getting the right mortgage all important
The trend throughout the pandemic was for buying homes, with the wider use of remote working, meaning that the convenience of renting when changing jobs frequently was no longer a necessity. The new setup of being able to work from anywhere means that many people could effectively ‘settle down’ and commit to buying earlier than they might have previously done.
This is one of the factors that has driven house prices up, and with inflation on the rise, the cost of a mortgage has become more vital than ever. Finding the right deal can be confusing, especially for those who might be in a hurry to buy before rising prices puts the dream of owning a home beyond their grasp. In cases like this, using a broker or a reliable online source like The Money Hub to do a lot of the background work for you can be a very good plan A.
There may be options here you might not have known existed, including fixing your interest rate so you know where you are financially for the initial term, or ones with a discount at the start so you can use the time to start a family if you choose. For this type of arrangement, it is usually best to work out finances based on the full amount of repayment rather than the discount so that there are no nasty shocks when this period ends.
Adding value to a home could place you ahead of the market
Of course, if the unpredictability of the housing market in 2022 means that you need a ‘plan B’, then buying a cheaper property that you can improve over time could be an option. Unlike in previous years (typically the first decade of the 2000s), where properties needing work were relatively expensive due to many new homeowners wanting a renovation project, fixer-uppers are typically now more realistically priced.
This means that a lower-priced home that can be more liveable for a young couple than it would be for a family with young children running around can be updated one room at a time and should appreciate in value at a greater rate than a rising market, so they can keep pace with the prices of whichever property they have they eye on next.
Using location to your advantage
As mentioned above, the increase in remote working and those opting for a more freelance style of working has meant that living within a commutable distance of your workplace is nowhere as essential as it used to be. Whereas you might have to pay a premium for a city apartment two or three years ago, you can now potentially buy more cheaply out of town or even out of state or get a much larger property for the same price.
While you could realistically expect that this might lead to a gradual rise in the relative values of out-of-town properties over time, that move could be slower, and getting now may also mean greater financial benefits for you in the longer term. You could even combine using this tactic with the one above and use the extra funds from other bills such as car payments or commuting costs to put toward improving the out-of-town property further.
A few final thoughts
The past two years have been unpredictable for many reasons, but for obvious one in particular. While 2022 has the potential to be more settled, the ripples from previous years are still likely to affect how many things like the property market are viewed.
For that reason, three things should still hold true, regardless of whether the property market is predictable or not. Top of this list is getting the best deal when it comes to arranging your mortgage, as this could potentially save you tens of thousands over the repayment period. Secondly, buying a property that you can add value can help you afford something you might not otherwise be able to and significantly improve your future financial position. Finally, using the rise of remote working to increase the number of locations you could afford to buy in increases your chances of finding your ideal property.
