With the insatiable appetite for property in residential sector of buying and renting I wanted to demonstrate the 5 reasons why I believe property prices will continue to increase in 2022:
They are:
- Interest rates are still at an all-time low; The % of income required to service your mortgage is still low. In 2008 it was 61.6% of your income. Today it’s only 35.9%. People will pay more if mortgage payments are manageable.
- Supply Issues: We need 25,000 houses across Scotland every year to keep up with demand. Since 2018 the average has been 20,000. It’s a similar picture in Fife. We simply can’t build enough to keep up with demand.
- Migration: Over the last 10 years, net migration in Scotland has been 20,000. If we can’t keep up with building houses just now, how are we going to keep up with building them for a skilled workforce migrating here.
- Inflation: So much money has been printed and pumped into the monetary system and it’s causing inflation. While it needs to be paid back at some point there seems no desire from the government to do this in the short term. If people have more money what’s the first thing they do. Spend it on a new house as well as other things.
- Demand for Yield: Interest rates are so low people are turning to property to maximise their returns. Property in Fife has gone up over 200% in the last 20 years. Plus, rental income is paid every month while the property goes up in value. There’s no other asset class that performs as good as this.
Taking this into account and the insatiable appetite for property I think the Fife housing market will continue to boom in 2022. Prices could rise another 5-6%. Some micro regions could be higher!
We’d be interested to hear your thoughts and if you want to discuss what it could mean for you. You can contact us here: https://www.fifeproperties.co.uk/contact/
#HousingBoom #HousingCrisis
