"2021 is set to be a record year for the housing market with the most moves by homeowners since 2007 and nearly £500bn of home sales."
High levels of demand, which have characterised the market since May last year, have been running at 30% above the five year average since the summer.
Combined market activity is set to amount to £473bn in transaction values this year, up £95bn on 2020, with the total number of sales expected to hit 1.5m.
Looking ahead to the end of the year, Zoopla's data shows that demand is expected to surpass levels recorded at the end of 2020, and is on track to continue into 2022.
An imbalance of supply and demand is continuing to support UK house price growth, which is currently running at 6.6% with all countries and regions of the UK registering growth rates well ahead of the five-year annual average with the exception of London.
As the UK emerges from the impact of the pandemic, housing transactions are expected to decline by 20% from their high of 1.5m in 2021, to 1.2m in 2022, in line with the long run average, but still relatively high compared to the last decade.
House price growth is expected to be 3% by the end of 2022 with the highest growth projected for the East Midlands and North West England while growth in London is projected to remain low at 2%.
Primary market momentum catalysts for 2022 stem from the ongoing reevaluation of housing needs, increased equity, and moves in parts of the labour force to more hybrid working. Taken together, these factors will continue to bring buyers and sellers into the market.
Furthermore, the scarcity of homes is set to continue well into 2022, supporting headline house price inflation.
Zoopla says mortgage rates are likely to increase modestly in 2022 ending the year closer to 3%, which would dampen demand for some buyers with mortgage rates still being low by historical standards.
Zoopla's Richard Donnell commented: “2021 is set to be a record year for the housing market with the most moves by homeowners since 2007 and nearly £500bn of home sales. The impact of the pandemic on the housing market has further to run but at a less frenetic pace. We expect the momentum in the market to outweigh some emerging headwinds from higher living costs and the risk of higher mortgage rates. The latest data shows a turning point in the rate of house price growth, which we expect to slow quickly with average UK house prices up 3% by the end of 2022.”
