“What’s going to happen to the residential property market?” – this is the question I’m most regularly asked at the moment, unsurprisingly considering the context of war in Ukraine, rapid inflation, rising interest rates, a volatile stock market and huge uncertainty in the world generally!
While the residential market has always been price sensitive, even over the last couple of record breaking years, the better family houses are still selling well over guide prices despite the constant gloomy economic news.
I was bidding for three clients last week on three different houses between £2m and £3.5m. All sold in excess of their guide and it was interesting to note that none of these houses were classic Georgian gems but all built from the 1930’s onwards. It could be said that none were aesthetic beauties (albeit I do accept this is in the eye of the beholder!) and none were in really peachy locations. Two had great views and two needed no work.
It was very interesting to see that one house achieved about 19% above its guide and didn’t come to the open market, the second was agreed with a delayed completion in March 2023 and the third was secured by a 100% cash buyer who is paying considerably less than the highest bidder.
As a result, it is clear to me that the market is still trading on a huge lack of supply and plenty of demand. Common sense would suggest that the market is likely to soften over the rest of this year, but I would not be surprised if it doesn’t remain strong well into 2023 with the weak pound will encouraging London investment.
As a friend pointed out as we were debating the UK economy, London’s popularity is unlikely to wane. If a person in the Finance Industry mentioned they had secured a new job and were moving to Frankfurt, we agreed the response would probably be much better received by their other half should the job be based in London!
We predict that supply will remain low and the market will therefore stay strong for some time to come.
