The market is very hard to predict, with many variables moving in different directions. On the one hand, we see rising inflation and interest rates and political uncertainty rooted in the Ukraine War. On the other, is a weaker pound fuelling demand from Dollar-based clients. Given this it is hard to predict whether we will see more sellers or more buyers in the market.
Interest rates seem certain to rise – something already being reflected in the swap markets – which may cause domestic buyers to reduce budgets. However, in the booming property market of 2007 interest rates were 5.75%, higher than currently expected for 2023.
Prime London is more affluent and equity-driven attracting a broad range of international buyers. More than half of the buyers up to September used cash. We expect properties to be keenly priced, as sellers manage risk, but the fundamental strength of London remains.
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