House prices in England and Wales are set to witness an upturn in January next year. This is according to the latest house price forecast from home moving services provider Reallymoving. So, what exactly does this mean for buyers? Let’s take a look.
What’s the forecast for house prices in January 2022?
Reallymoving bases its forecasts on the purchase price that buyers have agreed to pay when they search for conveyancing quotes on its comparison platform. Buyers normally search for these quotes 12 weeks before they complete. This allows Reallymoving to provide a three-month forecast on house prices.
It’s using this format that they have provided house price forecasts for the next couple of months.
First, they claim that house prices in England and Wales are expected to fall 0.1% in November and 1.1% in December 2021 based on deals agreed between buyers and sellers in August and September when the impact of the stamp duty holiday subsided and demand returned to more normal levels.
Sellers may also have been motivated to price their homes more competitively in order to attract buyers and hopefully complete before Christmas.
This downturn in prices is only likely to be short-lived, however.
With buyers agreeing higher prices in October due to a nationwide shortage of stock, a 2.5% increase is expected in the New Year. This, according to Reallymoving, will push the average completed sale price to £342,836.
Why should buyers act now?
The time between now and Christmas may provide buyers with an opportunity to get a good deal before the expected price increase in the new year.
It may also provide an opportunity to lock in a low-interest mortgage deal before the Bank of England raises interest rates, causing mortgage rates to rise.
With the holiday season approaching, there is also a chance that many buyers will postpone their plans to buy until the new year. That means that there might be less competition for available houses. With reduced competition, sellers may be more willing to negotiate on price.
What if you can’t buy right now?
If your finances don’t allow you to take the leap right now, don’t worry. There will most likely be other opportunities in the future.
The best thing you can do right now is to keep saving money. That way, if and when another opportunity presents itself, you’ll be prepared to seize it.
If you’re going to be saving for a long time, it’s important to think about where you put your money. In an era of rising inflation and low interest rates, keeping all of your cash in a regular savings account might not be the best idea.
If you can withstand a little risk, consider investing at least a portion of it. You can do so using a tax-efficient account like a stocks and shares ISA.
Although past performance is not a reliable predictor of future results, stocks have historically delivered significantly higher returns than savings accounts.
If you don’t fancy the stock market, another good way to speed up the process of saving for a home is through a Lifetime ISA. With this account, which is available to first-time buyers aged 18 to 39, you can save up to £4,000 per year and receive a 25% government bonus on your savings to use towards the purchase of a home.