According to Rightmove, for instance, house prices in the capital enjoyed a 0.2% boost in December in spite of the economic difficulties at play, push ...read full article
London Property Market
According to Rightmove, for instance, house prices in the capital enjoyed a 0.2% boost in December in spite of the economic difficulties at play, pushing the cost of the average home in London to over £660,000.
In particular, across the prime central London (PCL) market, demand and activity levels have remained robust. Recent data from Savills revealed that sales of properties valued at £5+ million were at their highest level in the first nine months of the year since 2006. Indeed, property values across PCL showed a 2.4% growth since the start of the pandemic.
However, as we venture further into 2023, it would be premature to suggest that such robust performance could continue unabated in the next 12 months; indeed, many of the economic and political challenges that we faced in 2022 remain. With this in mind, what's in store for the PCL market in 2023?
Prices will soften in the wider market
Firstly, it's worth contextualising that the Prime Central London market typically follows a unique trajectory with respect to the wider UK market.
For many analysts, prices could fall by as much as 9% this year across the wider market, as a result of inflation and rising interest rates. In fact, they've already started to soften.
In December, for instance, data from Nationwide revealed that growth had slowed to its lowest rate since mid-2020, while prices had taken their fourth consecutive dip in as many months. As such, there will likely be continued pressure on house prices in the wider market in 2023 as long as the economic factors that are diminishing buying power endure.
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