Buying A House in 2022
Some things never change but the home buying process certainly does. Even if the legalities of how a property is purchased stay the same, prevailing market conditions and wider economic factors can alter how property is bought and sold. Here’s how Open Property Group feels the home buying process may differ in 2022.
First Time Buyer Deposits
First-time buyers might need bigger deposits than ever before
Putting down a deposit is part and parcel of buying a first home but with the average UK property costing a record £272,992 in November 2021, according to the Halifax, the initial down payment has risen to an eye-watering amount.
In fact, mortgage lender Aldermore says the typical first-time buyer deposit has increased to £62,600 since March 2020 – that’s 18.6% of a typical property’s value and way above the 10% deposit that is usually touted as the benchmark requirement.
“The importance of first-time buyers to a fluid and fast-paced property market is often underestimated,” says Open Property Group’s Jason Harris. “Without property novices at the bottom of the chain, those further up the ladder will struggle to sell their properties and things can stagnate quickly.”
How Long Will It Take To Sell A Property in 2022?
It may take longer to sell a property
We have been living in an artificial sales environment for the last 12 months, with the Stamp Duty holiday, the desire to relocate, and a scramble for gardens and home offices creating excessive moving activity.
It’s a pace that’s not sustainable, says Jason: “I think the panic to move is over for many, therefore sellers will need to accept that their home may not sell as soon as it hits the market in 2022.”
“The moving process has, in the past, been helped along by historically low-interest rates but the Bank of England has flashed a warning that rates will rise in 2022. In fact, mortgage rates started creeping up as soon as this announcement was made,” adds Jason, “and even the smallest rate rise will put some people off moving in the coming months.”
Property Fall-Throughs Will Continue To Dog The Market
Industry-wide evidence suggests as many as 1 in 3 property sales fall through before it reaches completion and more than 306,000 sales failed to make it across the finishing line in 2020 alone – an increase of 12.26% when compared to TwentyCi’s fall-through data from 2019.
Will 2021 show another rise in fall throughs and will the trend continue in 2022?
Jason thinks this is a distinct possibility: “Buyers can pull out of a purchase for a variety of reasons and down-valuing is one to watch in 2022. Many sellers may read that in the press that values are at a peak and will assume they can price high, regardless of their home’s condition or location,” adds Jason.
Sales often unravel when a survey is carried out and it’s this milestone that buyers need to be wary of in 2022. “Sometimes the surveyor will advise the mortgage lender that the property is simply not worth what the buyer is prepared to pay, while a more detailed survey of the property’s condition will reveal detrimental defects that really hit a home’s worth. Down-valuing is more common in an overheated, overvalued market, like we’re currently seeing,” says Jason.
2022 Conveyancing Delays
Conveyancing delays may scupper more sales
Although 2021 was the year of stamp duty holiday deadlines and a backlogs of transactions – which created unusually high conveyancing and search set-backs – we’re not out of the woods just yet. Conveyancing delays have actually been building for a number of years and they could continue to jeopardise sales in 2022.
Rightmove figures suggest the time between a sale being agreed and completion is 127 days. Although down from its peak of 154 days in July 2021, the delay trajectory is on an upwards path, having risen from an average of 104 days seen between 2017 and 2019.
“Conveyancing has a major impact on the effectiveness of the home buying process,” says Jason, “and despite agents recommending ‘failsafe’ solicitors and advanced technology, conveyancing timeframes remain stubbornly high, which causes buyers and sellers unnecessary stress.”
Simplify the buying and selling process will become important
“After a frenetic and often frustrating 18 months for home movers, focus is going to shift towards the most simple and straightforward way of buying and selling property,” adds Jason.
Open Property Group is part of the ‘simplifying’ movement. We remove the drawn-out marketing process, eliminate the need for expensive estate agents, shorten chains and take on the conveyancing cost. “Moving home is stressful enough as it is without additional hurdles so we feel 2022 is the year of the direct cash buyer and simplified sale,” concludes Jason. Take control of your sale in 2022 - request your no obligation cash offer now.
Watch the video below which explains more about selling your property fast or click here to continue reading this article