With a number of potential headwinds slowing the market, including the upcoming general election, the Mortgage Market Review, talk of interest rate changes and the Scottish Referendum, the figures are rather surprising, especially where Scotland is concerned, according to the report from Strutt & Parker.
‘Interestingly and somewhat counter intuitively, Scotland is not showing a slow down through the data, with values up 29%, and volumes up 22% on the second quarter of last year,’ said Stephanie McMahon, head of research at Strutt & Parker.
‘Normally markets slow down due to uncertainty and on that basis we would have expected Scotland to pick up in the latter half of the year but at the moment it seems to be bucking the trend,’ she added.
Greater London remained the strongest performing region with prices up 14.9% to a median house price of £365,304 whilst the North East saw the weakest performance with a decline of 2.3% to a median price of £120,250.
As part of the report, Strutt & Parker also analysed the behaviour profiles of its buyers and sellers who sold or purchased homes over £2 million outside of London. In prime central London, nearly 50% of buyers move from somewhere else in London. In the UK that figure declines to nearly 14% but when looking at the £2 million plus market outside of London, the figure jumps back up to over 20%.
‘Last year has shown a distinct increase in international buyers, including expats as well as foreign nationals who own houses in London and have decided to settle with stronger roots in the UK,’ said James Mackenzie, partner in the country homes department at Strutt & Parker.
‘They have stretched out to the Cotswolds and Hampshire specifically. We are starting to see a significant increase in enquiries from London based British purchasers looking to move out to the country and I am sure it will only be a matter of time before the balance returns to normal,’ he pointed out.
Strutt & Parker and its retained economic advisors Volterra are predicting 8% growth for residential house prices across the UK in 2014.
‘Improved economic foundations would certainly suggest that prices will continue to rise over the next few years, while the biggest perceived uncertainty surrounding the property markets over 2014 to 2015 will continue to be the looming election,’ said McMahon.
‘This uncertainty will be most significant around the £2 million price bracket due to the potential change of government and associated possibility of mansion tax. We therefore expect that prices growth during the remainder of 2014, and even more so in 2015, will be sensitive to prevailing political press and expectations,’ she added.
According to Michael Fiddes, head of regional residential agency at Strutt & Parker, the election does not appear to be affecting the market outside of London. ‘A lack of stock continues to drive the market. The autumn of 2014 may in hindsight be a canny time to be selling,’ he added.
