Prime property prices in UK mostly unchanged but showing positive outlook
Prime property prices in the UK were largely unchanged in the third quarter, falling by 0.1% over the three months to the end of September, the latest index shows.
It is the second quarterly fall but on an annual basis growth remains positive at 0.5%, according to the data from Knight Frank while the prime market in London has seen a fall of 1.8%.
However, the current growth in the prime market outside of London is notably slower than the peak of 5.2% in 2014. The Knight Frank report says that the current moderation in price growth is largely a result of recent stamp duty increases being factored in to asking prices and offers.
The report also shows that there are signs that prime property buyers are looking outside of London to the Home Counties and overall while the headline figures suggest that the market has been relatively subdued, activity has remained resilient in the wake of the UK’s vote to leave the European Union, with some leading indicators of activity remaining strong.
The positives include a 13% increase in new instructions between July and August compared with the same period of 2015 and Knight Frank says this means that stock levels across the prime market have started to tick up, an early sign that vendors, many of whom had delayed putting their homes on the market as a result of the referendum, are returning to the market.
There was also a 7% increase in the number of properties going under offer over the same time, however, Knight Frank sales agents note that sensible pricing remains key, especially for properties valued above £1.5 million where the highest rate of stamp duty applies.
‘The strongest markets continue to be affluent towns and cities which have outperformed their more rural counterparts, although the differential has narrowed in the last six to 12 months,’ said partner Oliver Knight.
He also pointed out that average values for properties in urban locations have risen by nearly 2% annually and are around 5% above the previous market peak. In comparison, annual price growth for rural properties was 0.5% and remains 12% below peak levels.
‘Prime urban markets benefit from good schools and amenities as well as excellent transport links to London, which make them among the first port of call for buyers from the capital,’ he explained.
‘Our figures show a 43% increase in the number of sales to Londoners in the Home Counties in the first nine months of 2016 compared with the same period the previous year,’ he said.
‘We will continue to keep a close watch on key market indicators in the coming months to assess any potential longer term impacts of the referendum result,’ he added.