2022 was turbulent for most sectors, and London’s luxury housing market was no exception. The good news is, with recent data showing the UK property market, in general, displaying signs of improvement, it’s high-end properties that are really leading the charge. After rising interest rates, hundreds of mortgage deals being pulled and new home buying enquiries falling at a somewhat dramatic rate, making any real predictions at the close of 2022 became difficult, to say the least. However, multiple recent reports from a host of estate agencies confirm that this year is progressing much more positively than expected.
There are several elements that point to a healthy prime market going forwards. For one thing, the number of new buyers registering at the beginning of the year was higher than it’s been since 2019. Similarly, the number of new listings coming onto the market was higher in January than over the course of the previous decade. This means the prime property market has ‘started the year better than expected’ said Tom Bill, head of UK residential research for Knight Frank. He added ‘a double-digit price fall does not exactly feel imminent.’
There has, without doubt, been a cooling-off period for the wider market, with inflation and interest rates still rising, causing house prices, in general, to fall of late. Yet, as always, the prime market, particularly in Central London, continues to operate on its own terms. For instance, the latest data from Savills shows this sector performing well towards the beginning of 2023, and that’s continued primarily because, as it’s driven by global equity, it’s far less affected by what’s happening on the domestic front. An increase in overseas investment is also a factor, encouraged by the weaker pound.
As ever, though, there remains a note of caution, with Richard Donnall, executive director at Zoopla, saying, ‘the start of 2023 is more of a slow-burn than in recent years’. Their recent report shows many home buyers waiting to see if mortgage rates and house prices will start to fall more quickly as the year progresses. What is certain is that the prime central market continues to flourish, with a growth of up to 6% expected for 2023, regardless of what’s happening more broadly.
Sources: FT Adviser, Mansion Global, Bloomberg
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