Prime country house prices in the UK increased by 0.1% between April and June and on an annual basis they were 0.2% higher, according to the latest index.
While there was little movement in terms of price growth in the second quarter of the year, activity levels were robust compared with the same period in 2016, says the index from Knight Frank.
The index also shows that prime properties in town and city markets continued to outperform, rising by 1% in the second quarter and by 1.5% annually. Knight Frank forecasts are for a 1.5% increase in prime prices in 2017.
Knight Frank housing market data points to a more active market, albeit one that remains price sensitive following changes to property tax in 2014 and 2016. Agents report that against this backdrop it is vendors who are realistic about pricing, or willing to negotiate, that are achieving sales.
Knight Frank figures show prime sales volumes rose by more than half between April and May, compared to the same period in 2016. But the report points out that this comparison flatters this year’s performance, as the 2016 data was adversely impacted by the introduction of the additional rate of stamp duty.
But even against the level of market activity in 2015, sales volumes were still higher by 29%. The report says that a pickup in sales volumes in the past few months also suggests that prime markets outside of London are weathering much of the political and economic uncertainty as a result of the general election, as well as the ongoing discussions surrounding Brexit.
The figures do, however, also reveal some wider trends. Properties that are located close to good schools and transport links remained the most in demand over the course of the quarter, particularly in town and city markets which outperformed their more rural counterparts.
This was supported by a 1% increase in values for prime town houses between April and June. In comparison, homes located in more rural locations fell in value by 0.2% over this period. On an annual basis, prices were 1.5% and 0.4% higher respectively.
The report also points out that a shortage of good prime housing stock continues to act as a barrier to further growth in the market. If sustained, this could put upwards pressure on the market over the remainder of the year. Knight Frank forecasts are for a 1.5% increase in prime prices in 2017.
