A Year On….‘Mini Budget’ and Interest Rate Rises… Were We Right?
As estate agents, we are quite often asked our opinion of the market. Never was that more prevalent than a year ago when many clients were asking our opinion of the market and their next steps in navigating it.
Our overriding message was not to panic. This has proved right; the market has remained stable in West London over the last 12 months, and we are now starting to see properties achieve more of a premium than what comparable properties were selling for before that famous ‘mini-budget’.
In our 13-year history, we have never given advice that isn’t right for our clients. We would not have organically grown to the size we have if we didn’t give the very best service to each and every client and advise them on what’s right for them. In turn, this level of service gains more client-to-client referrals, helping us as a company to grow.
A year ago, there was fevered speculation in the media that the ramifications of the Liz Truss and Kwasi Kwarteng led ‘Mini Budget’, with the subsequent sharp interest rate rises, would mean the value of property would drop, with some commentators predicting 15-20%.
We outlined the reasons why we felt the value of UK property, and London in particular, would remain robust. Our reasoning proved correct, with prices remaining stable and demand continuing to out-strip supply, month on month, in our West London market.
So why has the market remained so robust this year? Michael Bolger, Area Sales Manager, takes this view:
“London is one of the most, if not the most, sought-after places in the world to own property. Family homes, in particular, do not come onto the market in any great abundance, and every time one sells, you are typically looking at a 20-year lifespan of ownership.
“It is also estimated that in the UK, mortgage debt is £1.6 trillion on a total housing stock value of around £8.4 trillion. This macro analysis shows even if some commentators may suggest that rising interest rates may impact the market, the actual mortgage market affects only around 20% of overall property ownership.
“When you mix in the above two factors with a massive rise in rental demand, buyers look at the decision-making process between buying and renting and decide to go in for the purchasing decision, provided they can see the value in what they are buying.
“All in all, the market, from everything it has had thrown at it – let’s say in the seven years of negative headlines since Brexit – has remained robust.”
To speak with Michael, please contact him at:
Area Lettings Manager
Direct Dial: 020 8017 7946
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