PART OF THE WEEK: Savills hopes housing market remains resilient amid cocktail of economic woes
Savills hopes the housing market remains resilient amid a cocktail of economic woes.
Facing the prospect of a fall in property prices following the Bank of England’s biggest rate hike in 27 years, the broker will report its half-year figures on Thursday.
Investors will have plenty to think about. Last week Savills published its report on the best housing market in the UK.
It expects prices in central London to grow by 4 percent this year, down from an earlier forecast of 8 percent. This is partly due to non-returning international buyers, war in Ukraine and political uncertainty.
But central London’s recovery is expected to kick off in 2023 with a 7 percent growth rate as foreign demand declines. The city will want to know how Savills plans to deal with the impact of the crisis in the cost of living for home hunters and first-time homebuyers.
While spending pressures appear to affect price growth in London’s prime next year, Savills said workers value being close to the office and will return to the capital in the medium term, despite the hybrid labor trend.
In May, Savills was confident in 2022, despite rising interest rates, inflation and war. It also noted that the recovery in China was slower than expected, while housing availability in the UK remained ‘significantly reduced’ as demand outpaced supply.
Peel Hunt thinks the “big debate” for Savills will be about the impact higher interest rates have on the transaction side of the business.