A statement to shareholders by the Savills lettings and estate agency admits that it under-estimated how strong the high end prime residential sector would remain during the current economic crisis.

Savills is a global business with substantial consultancy and commercial property interests. 

Its trading update statement says: “One highlight in the year has been the relative strength of the prime residential market, which undoubtedly continued stronger for longer than we originally anticipated and helped mitigate the effect of volume declines in commercial transaction activity.”

But it does urge caution, continuing: “We anticipate that the abnormally high UK transaction volumes of the ‘post-lockdown’ market will reverse in 2023 as the market normalises to the prevailing economic environment. This is likely to be particularly notable in markets outside London. 

“The international nature of the Prime London market, lower dependence upon mortgage financing relative to the wider markets and attractive valuations in a global context, should partially mitigate the effect of volume reductions in the residential market overall.”

It adds that in the coming year “challenging macro conditions” are expected to continue with inflation and interest rates remaining uncertain for some time. 

However, it anticipates that international investment from China is likely to recover in part this year, thanks to that country relaxing many of its Covid-related restrictions.

Savills’ full figures for the 2022 year will be released in March.