Equity ‘key driver of market prices’
SAVILLS has been observing the prime market behaviour for over 30 years and has noticed that trends are influenced by equity rather than mortgage rates, lending policies or the world of debt in general.
They say that it is new wealth, bonuses, savings and investment, domestic and overseas, that drives these markets.
Savills say it has long suspected the equity used in prime markets has not just leaked but sometimes cascaded into surrounding markets and down into the mainstream markets. Anecdotal evidence has pointed to such a “champagne tower effect” but it is difficult to measure and has been ignored despite being an increasingly obvious component of UK housing market behaviour.