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Fully expected, and yet a total shock: on Thursday February 24th, 2022, war came once again to Europe, as Russia invaded Ukraine on a pretext about as solid as a rotten sole plate. I have watched, mesmerised, as footage has rolled out across 24 hour news; I have been driven to dark dismay by news stories of little girls the age of my youngest daughter being killed in the fighting; I have been awestruck by tales of courage and bravery coming out of beleaguered Ukraine – everything from grandmothers challenging Russian tanks, to farmers stealing them with their tractor and a towing rope, to Ukrainian Sailors telling Russian warships to go fuck themselves rather than surrender, to the President of Ukraine himself, Volodymyr Zelenskyy, rising to the occasion – a true leader at the very moment his country needs one most.

With all of this unfolding before our eyes, it has felt somehow crass and even guilt-inducing to continue to behave ‘as normal’; to attend that event; to grab that pint at the pub; to celebrate that new listing; to revel in that quick sale. Our lives go on, whilst lives in Ukraine – and in Russia, for that matter – are being shattered even as I write. Neither have I felt I can express my thoughts about what is going on, for fear of being misinterpreted as doing so with selfish intentions. I know I’m not alone.

I say ‘our lives go on’, but whilst it’s easy to feel that this is happening somewhere else to somebody else, the effects of it will be far reaching and will be felt here. We are fortunate that we can live here without fearing the sight of Russian tanks rolling down our own High Street, and we may feel guilty relief at the thought. Nevertheless, it is worth taking stock of the various ways in which we will be affected here in the UK, and that includes the effect it could bring to the UK Property Market – important, if not as obviously serious in the way that lives being lost in Ukraine clearly is, but important nevertheless because this market drives so much of our national economic activity. Here are some points to consider – but I hasten to add, I write as an individual and as an Estate Agent, and I am certainly not claiming to be an economist; besides which, my views are my own:


Inflation and Interest Rates

Inflation has been shooting up even before there was a European war going on, driven not in small part by the rising cost of food and fuel. When inflation rises, central banks often aim to control it by increasing interest rates, and we have seen The Bank of England do this already with two increases within the last quarter – a 0.4% rise on where the base rate was. It hasn’t had huge impacts so far, but I already had a sense that interest rates would be likely to go up at least once more before June, and we could well see this expedited and, perhaps, go further than it might have; maybe another increase at the next meeting of the board, and perhaps by another half of a percent in one go, rather than by just a quarter. That would be a 0.9% rise within a four to six month period, and we would see consequent increases to mortgage rates as a result, with a more noticeable impact on mortgage ability than we’ve seen thus far – for first time buyers and second-steppers, but also for those remortgaging. The reason we can expect this is due to those aforementioned food and fuel prices; Ukraine is one of the largest producers of agricultural produce in Europe, so the supply of staples such as grain – and wheat in particular – is going to be hit, thus pushing food costs up. Likewise, Russia is a major exporter of gas and oil, and whilst it only supplies 3% of the UK’s gas and only 6% of our crude oil, it supplies greater quantities to Europe and the rest of the world. Europe and other countries will be drawing more gas and oil from other suppliers, including those that supply the UK, making those commodities more scarce and in turn more expensive – so expect to feel it at at the petrol pump soon. With regards to fuel, the energy price cap was already raised in the UK earlier this year, to add around £700 to our household bills each year. This cap could well be raised again to cope with increased procurement costs, and this will fuel inflation – already through 5%, predicted to head towards 7% and I think likely to bust through even that, to 8 or 9%, with these added pressures.

Sanctions against Russia and Russians

The British government, like many others, has imposed sanctions and penalties against Russia which will bite – not least the withdrawal of SWIFT which allows the movement of money internationally. There are around 150,000 Russians resident in London alone, let alone throughout the rest of the UK, and their inability to move money will have some impact on the property market. Some, but not as dramatic as one might think. The 3% stamp duty levy imposed on international property purchasers, as well as restrictions Russia imposed itself to keep Russian money at home, has already reduced the number of Russians purchasing UK property – and so whilst there could well be some noticeable wobble in the super prime and luxury property market, the general property market should remain largely unaffected compared to where it has been in more recent times. Something to bear in mind, but not dwell on, particularly outside of the capital.

Russian Roubles, Global Economics

The measures imposed on Russia by countries right across the world has perhaps taken it by surprise, and after just a few days it is clear to see the immediate and rather extraordinary effect this has had. Russian citizens – and let’s remember here, not all are in favour of what is going on in Ukraine, not by a long way – have started to run on the banks, withdrawing money to purchase commodities as the value of the Rouble plunges. At the time of writing, it has fallen by 40% and looks to be falling further, whilst by contrast the FTSE has already recovered the majority of the value that it lost after the initial Russian invasion on Thursday. Still, although (perhaps surprisingly) the Russian economy makes up just 2% of the global one, we won’t see such dramatic losses within that economy without feeling the effects here; we are all too interdependent and interlinked in the 21st century not to. We can feel some comfort in knowing that very little of British pension funds are directly exposed to Russian markets; but, there will still be some ripple effect, and as global markets adjust – depending on how long troubles do last in Ukraine (and one suspects that the damage will be long-lasting, even should tanks and troops remove themselves sooner than later) – the general downturn that we can expect is bound to have an impact on property prices here. Whilst they may not drop, I do think that when combined with inflationary living costs and rising interest rates, we can definitely expect property price rises to slow down and that the volume of property transactions will be behind where they may otherwise have been.


As a general summary, when it comes to  the property market, my prediction is that we will be looking at a slower market with shorter price growth than I might have predicted at the beginning of the year, particularly relative to the very fast pace and peaked prices that we have seen over the past months. The noticeable effects of this will probably kick in by the third quarter of 2022, but my expectation is that it will look like a ‘flattening off’ rather than a drop. It is not a disaster – and certainly not by comparison to what life might look like if you were in Kyiv right now. This article is certainly not written to in any way suggest an equivalence; it is written because 63% of householders in the UK own the homes that they live in, and therefore this matters – even if it only matters relatively speaking.

Allow me to sign off by describing with no room for doubt my own personal shock and outrage that this is going on at all in this day and age, an equivalent outrage to that which I feel about recent events in Syria, Ethiopia, Myanmar, the Amazon, and in so many other parts of the world. I unequivocally stand with Ukraine, as I do with all oppressed peoples around the world whom have war and oppression brought to them against any will whatsoever.

Живи, Україно, прекрасна і сильна!  –  Zhyvy, Ukraino, prekrasna i syl’na!  –  Live, Ukraine, beautiful and strong!