Property values across London’s prime property market generally were 2.1% lower annually in the third quarter of 2023
The prime property market in London seems to be holding up comparatively strongly in the face of increasing interest rates, according to an index.
House prices in prime central London in the third quarter of this year were typically 1.2% lower than a year back, according to estate agent Savills.
Property values across London’s prime property market generally were 2.1% lower annually in the third quarter of 2023.
Savills’ definition of prime properties is those in the top 5% to 10% by value in any given market.
Earlier this week, another index, from Nationwide Building Society, suggested that across the UK housing market generally, prices stayed 5.3% lower than a year back in September. This was the same as the annual percentage decline that Nationwide had logged in August.
Mortgage rates have climbed in recent months amid increases in the BoE base rate, although for some rich buyers who are not dependent on borrowing to fund a home purchase, this may be less of an issue.
Frances McDonald, director, Savills residential research said: Mortgage borrowing is largely optional in the prime central London markets, and so we saw a rise in borrowing when interest rates were at historic lows during the pandemic.
Now these markets are gaining from rich buyers’ ability to transact with cash or low LTV ratios as rates have increased, she said.
But not all prime markets are supported to the same level by reserves of cash and equity, McDonald added.
She said: Prime family house markets of south-west and west London, especially, are typically more highly leveraged and deals here are becoming increasingly price sensitive.
