The prospect of a rise in interest rates is likely to curb house price growth in the mortgaged market. Mortgage approvals were 12% lower in June than in January on a seasonally adjusted basis which could be an indication of early cooling signs in the mortgaged segment of the market.
On the other hand and as the table above indicates, prime central London is not showing similar signs. This market is still dominated by foreign buyers who tend to be less affected by interest rate movements and the general costs of housing. Such investors are mainly driven by wealth preservation, long term capital appreciation, and the domestic and international geopolitical environment, which over the years has resulted in a steady flow of capital into central London. Apart from a possible holiday induced decrease in activity in August we do not anticipate any meaningful slow down in the demand for prime central London properties in the short to medium term.
