Quality matters as the UK property market slows

 
Best in class properties have fallen an average of just 1.4% over the past six months and values are within 2% of their peak, says property adviser Savills.
 
On average values have fallen by 1.9% over the past six months, leaving them 7% down from their peak.
 
By contrast, properties that are blighted by factors such as road noise, pylons or being the wrong side of the track are now over 13% from peak, having fallen by 2.6% in six months. Some blighted country houses have lost almost of fifth of their peak value.
 
The trend mirrors the pattern seen in the downturn of 2008 and early 2009, when blighted properties fell by a total of 28% from peak, compared to just 13% for the best properties, the company points out.
 
The pattern is largely uniform across all price bands within prime, although best in class homes in the £1 million to £2 million price band are now closest to peak at 0.9% below on average. By contrast, in prime London properties in this price band are now worth 3.5% above peak.
 
Buyers of properties worth over £2 million, particularly country house buyers, appear to be the most discerning buyers and least tolerant of imperfections. In this price band, blighted properties have lost almost a fifth, some 17%, of their peak value.
 
‘The fact that buyers are increasingly differentiating between the best and most popular properties and locations and the rest is a clear sign that we have shifted to a buyers’ market,’ says Lucian Cook, director of Savills Research.
 
‘This analysis suggests that the gulf between the best and the rest is now a full ten percentage points or more, and is forecast to widen as the market softens through 2011. If, as we expect, the choice of properties available to buyers grows, realistic pricing will be the key to achieving a sale for a property that is not best in class,’ he explained.
 
‘By the same token, quality will put a floor under any falls in the market and the best will undoubtedly outperform when the prime markets enter their next growth phase in late 2011 or early 2012,’ he added.