High interest rates have had a big impact on property prices in London in the first half of 2023. It has helped to cool them, with dips in both Q1 and Q2. However, the impact has been smaller for higher value properties in Prime areas. We want to have a look at the situation here. Then, if you invest and need a service for guaranteed rent in London, you can speak to us.

Q2 performance

In the second quarter of 2023 the price of homes with values under £500,000 had a dip of 2.5%. Properties with valuations between £500k and £1m were down by 2.1%. However, at the top end of the market, homes with values over £5m were flat and did not take as much of a hit.

Prime London in general had a relatively strong period, showing its resilience. In Q2 values were only down 1%, a smaller loss than other parts of the city. If you look at the wider picture though, values were actually still 3.9% above the pre-pandemic level.

In addition, if you compare to the 3.5% loss for prime property outside the capital, the situation is even better. Plus, guaranteed rent in London can protect income from investments.

Sales

The period has actually been a strong one for sales too. In the past two quarters there have been over 130 agreements for homes worth over £5m. At a higher level, in the last year 160 homes with values over £10m were sold. This shows there is still plenty of activity. Interest is coming from various parts of the world too, including Turkey, the US, and Scandinavia.

Interestingly, cash has been king during the period. An impressive 71% of the high value homes in Prime London were bought without mortgages between Jan and May 2023. If you compare to the same period in 2022, it is an 11% jump from 60%. The total is also above the pre-pandemic level of 61%.

Cash has become the best option for property buyers because of the high interest rates. Wealthy investors can save a huge amount by not getting a mortgage. Rates have been climbing for the last few years in a bid to help to ease inflation. It hit 6% this week, the first time it has been back to that height since November.

The interest rates are also partly to blame for Prime London showing more resilience than suburban spots. More buyers who target areas in Outer London rely on mortgages to purchase. So, higher interest rates price some people out of buying. That cools demand and prices. However, people who buy with cash don’t have a deterrent. They can actually be even more active if values come down because their money can go further in that period.

Do you want reliable guaranteed rent in London?

Whenever you invest in homes in the city, it is a good idea to think about your income. This is especially true with high end properties because you could miss out on a lot of rent. Luckily, we can help. Our services are the best in the city. They can address your concerns and provide the assurance you need.

So, if you want to learn more about guaranteed rent in London and how it could help you, please get in touch. We would be happy to explain how it works and the benefits.