SHARE OF THE WEEK: Savills hoping housing market remains resilient amid cocktail of economic woes
Savills will hope the housing market remains resilient amid a cocktail of economic woes.
Faced with the prospect of property prices cooling after the Bank of England’s largest lift in interest rates for 27 years, the estate agent reports half-year results on Thursday.
Investors will have plenty to mull over. Last week Savills published its report on the UK’s prime housing market.
It expects prices in central London to grow 4 per cent across this year, down from a previous forecast of 8 per cent. This is partly due to international buyers not returning, war in Ukraine and political uncertainty.
But central London’s recovery is forecast to kick-start in 2023 with growth of 7 per cent as overseas demand creeps back.
The City will want to know how Savills plans to deal with the impact of the cost-of-living crisis for house hunters and first-time homebuyers.
While the squeeze on spending looks set to affect price growth next year in prime London, Savills said workers value being close to the office and will return to the capital over the medium term despite the hybrid working trend.
In May, Savills was confident about 2022 despite rising interest rates, inflation and war.
It also noted that the recovery in China had been slower than expected while the availability of housing in the UK continued to be ‘significantly reduced’ as demand outstripped supply.
Peel Hunt reckons the ‘big debate’ for Savills will be on the impact higher interest rates have on the transactional side of the business.