For the prime country residential property sector prices this year have remained flat with a decline of 0.1%. Factors including economic conditions and increased interest rates have helped keep buyers on the sidelines and a decrease of available homes for sale.
There are however locations that are experiencing price growth in the prime residential markets including the Midlands and the North at almost 2.4%. Also seeing property value increases are the south of England and Scotland especially in Edinburgh and Glasgow with markets having their best results in 10 years.
London has already had areas of prime property values decreasing by 1% or roughly £5000 to an average price of to £471,986 over the past year ending in February 2018 in a recent Land Registry analysis. Locations in the city that have the biggest price declines are in the most expensive neighbourhoods.Tower Hamlets seeing a decline of 7.9% , Hammersmith & Fulham with 5%, City of London with 4.4%, Wandsworth 2.6% and Westminster declining in price by 2.4%.
In its overall review of the national prime residential 2018 activity Savills states that for London:
‘By contrast, prime housing in the London commuter zone has witnessed small annual price falls. The weakness in London’s prime housing markets has limited the flow of equity coming out of the capital, and, in turn, has curbed enthusiasm among other buyer groups.’
The report says that locations including Northwood and Cobham have experienced price declines of 2.8% in the past year. In the thirty minute commuter zones of Guildford and Harpenden prices have decreased by 1.6%.
Also in the report :
‘These prime market trends mirror the mainstream market. The RICS UK Residential Market Survey indicates subdued levels of new-buyer enquiries and new instructions coming to the market, while Nationwide put annual house price growth across the UK at just 2.5% at the end of March.’
Not surprisingly buyers who are entering the market are being cautious and particular about their home purchase with the quality of the property and not just location being deciding factors.
‘In the prime markets, we are seeing higher demand for more traditional stock. Prime period homes across the country have had sustained, albeit marginal, price growth.’
For urban areas the the price growth over the past 5 years has been measured at 16% with the access to amenities, schools and transportation being the most important factors.
Because of the flat prime sales market sellers are having to readjust their sale prices to current market conditions. Savills analysis :
‘And there is good evidence that where properties are priced according to market conditions, transactions are proceeding. Figures from TwentyCi suggest that the number of agreed sales for properties worth more than £1 million were higher in the first quarter of 2018 than in the first three months of either of the two preceding years.’
Expectations of future prime sales are for the market to remain price sensitive for at least the next two years as a result of economic and political outcomes as well as increases in interest rates.