Prime Central London Real Estate Market Soars Amid Economic Challenges
Amid the ongoing economic challenges, the Prime Central London (PCL) real estate market has managed to record a 2.4% rise in values, as reported by Savills. This growth was mainly driven by the sales of luxury properties, worth £5 million or more, which reached an all-time high in the first nine months of the year, since 2006.
As we step into 2023, it's crucial to understand that the PCL property market follows a different path compared to the rest of the UK. While experts anticipate a possible 9% decrease in prices across the wider market due to factors such as inflation and rising interest rates, the PCL market is expected to remain unaffected and potentially outperform the other regions.
This is largely due to the fact that the PCL market has a significant presence of high net-worth individuals, whose purchasing power is likely to be less affected by the economic slowdown, in comparison to the middle and lower class market. The depreciated pound has also attracted a substantial number of foreign investors, constituting 57% of the capital's property buyers last year, according to a report by Carter Jonas.
Many PCL property owners and investors are also buy-to-let landlords, and the rise in demand for rental properties and increasing rental prices are contributing to better rental yields. With an expected 6% hike in rent prices in 2023, buy-to-let investors are poised for potential profits. Additionally, the scarcity of available properties in the PCL market, with a predicted increase in demand by 30%, should provide further support for prices in the coming year.
Despite the ongoing economic and political uncertainty, the PCL real estate