The media have been full of stories lately predicting a housing market slump as interest rates rise. Of course that’s a predictable forecast but as usual it assumes everything else remains equal. The same forecasters all assumed house prices would fall at the start of the pandemic.
In the real world there are often unexpected events and trends which mean the received wisdom doesn’t actually come to pass. Some of our buyers are actually more motivated than ever to buy now because they think that if they leave it till next year, their monthly mortgage outgoings will be a lot more expensive, perhaps unaffordable. We aren’t losing any sales to buyers proceeding with a mortgage, – they’re pretty much determined to get it over the line.
House prices are also not just a function of rising or falling demand, – they are also a function of rising and falling supply, and at the moment there are less houses and flats available to buy than usual, so for now we are still getting bids from buyers at similar levels to those before the mortgage rates rose.
There are also aspects of demand which may be driven by other costs. The cost of private education has risen so much over recent years that its much cheaper for a family budgeting for their children’s education to buy a house near a high performing state school, and this factor drives many sales in our area. We also have the special factor of buyers from Hong Kong having identified this area as a great place to invest and/or resettle and this too is adding to demand. Indeed a significant proportion of property purchases in Richmond and Kingston Boroughs may be wholly or partly funded from outside the UK, and any buyer who has funding in US dollars or a currency linked to the dollar is already looking at buying property in the UK at an attractive discount because of the fall in the pound. One person’s problem is always another person’s opportunity. So for the moment house prices and market activity remain resilient in Petersham, Ham and North Kingston.