ANN/THE STRAITS TIMES – London’s most expensive homes are managing to defy a slowdown in Britain’s housing market.
New sales instructions for homes priced at GBP5 million or more were 74 per cent higher in the final quarter of 2022 compared with the pre-Covid-19 average, according to data compiled by research firm LonRes.
“In 2022, sales of GBP5 million-plus homes, which account for just eight per cent of the prime London housing market, were 63 per cent higher than their pre-pandemic average,” said LonRes Managing Director Anthony Payne. “It is not surprising, therefore, that it tempted would-be sellers to put their homes onto the market.”
Britain’s housing market is facing disruption as it adapts to higher borrowing costs and the threat of a drop in house prices. Three of the nation’s biggest home builders last week reported a plunge in sales and hinted at more turbulence for the market in 2023.
This is not yet playing out in the market for London’s priciest homes. Wealthy buyers are largely shielded from higher mortgage rates because they are less reliant on debt when purchasing a home. Sellers are equally less likely to be forced into deals because of the rising cost of borrowing.
Given the discretionary nature of top-end sellers, vendors are more likely to withdraw their homes from the market than agree to cheaper deals. At the same time, the weakness in the pound against the United States dollar is drawing more international buyers to London’s luxury market.
The wider London market saw activity drop off in the last quarter of 2022 as borrowing costs soared amid spiralling inflation and increasing central bank rates.