Growth figures reveal stability in the prime regional markets in the UK with average prices up by 1% outside of London in the first quarter of 2015, according to data from Savills Research.
This means that year on year they have risen by 2.2%, despite the increase in stamp duty on sales over £937,500 that was introduced in the Autumn Statement last year and price growth continued to be strongest in the prime urban markets in the first quarter of the year.
The firm’s latest Market in Minutes report also shows that in the 30 to 60 minute commuter band around London, prices of prime listing in town and city locations have risen by 5.8% year on year. This is the highest of all of the sub-categories of listing within Savills’ prime indices.
By contrast, prices in the prime London markets are showing annual price falls of 1.6% marking an anticipated turning point in the market, where the gap between the pricing of prime listing in London and the regions begins to narrow.
Generally the country markets have remained a little more subdued. In particular, the large houses have had to contend with the biggest increases in stamp duty and the threat of a mansion tax in the run up to a general election. So whereas prime country cottages have seen annual price growth of 4.4%, prices of manor houses have on average fallen by 0.8% over the course of the year.
Similar concerns have affected the markets on the high value private estates in the South East, such as St George’s Hill and Wentworth. However, across the London suburbs and the inner commuter zone, prices have risen by 2.2% in the past year on average, meaning that they are 6.8% above their pre-crunch levels.
In England quarterly price growth also returned to markets beyond the commuter zone with prices rising by just over 1% having softened marginally in the wake of the autumn statement. In particular, markets such as Bath and Cheshire are continuing to benefit from demand from aspiring young families and downsizers.
Coastal markets that have generally been much slower to recover due to their dependency on discretionary buyers, also showed encouraging signs of increased activity as prices increased by an average of 4.1% over the past year.
The divide between prime housing in urban and rural prime locations is also evident in Scotland, where prices rose marginally in the quarter leaving them up by just 0.4% year on year, compared to the prime markets of Edinburgh which are showing 6% annual growth.
All of the regions, from the prime suburban towns in striking distance of London to the prime markets of the Midlands and the North, have seen annual price growth. However, there are significant differences in where prices sit relative to their peak in different sectors of the market. This is likely to shape the market over the medium term, says Savills.
‘In the same way that the value gap between London and the commuter belt has led to a significant pick up in interest from prospective London buyers, so the value gap between the commuter zone and beyond should drive a ripple effect as certainty returns to the market,’ the report explains.
Savills forecast projects growth of 1% in prime markets beyond London if there is no mansion tax introduced after the election but a fall of 3% if there is but thereafter prices pick up with growth of 6% next year, and then 5% in each of the following three years.
‘The timing and strength of that ripple in the prime market is dependent upon the extent to which the election brings political certainty and the tax policy adopted by a future government, which is reflected in our forecasts,’ it concludes.
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Source: Property News Spain