Modest growth for UK prime country market predicted, particularly closer to urban areas
Prime housing markets outside London have experienced modest growth since the middle of 2014, but the overall rise of 3.4% over the last three years hides stronger performance pockets, a new analysis shows. In the year to September 2017 the price of prime country properties worth between £4 million and £5 million fell by 5.3%, and those worth £2 million to £3 million by 1%. Properties worth between £1 million and £2 million rose by 0.2%.
Prime prices in the country remain around 13.6% below the previous market peak back in 2007. Overall, according to the analysis from Knight Frank which is forecasting average growth of 1.5% across prime country markets in 2017 and of 2% in 2018. Overall price growth in the prime country market has been steady, and has outperformed the market in prime central London over the same time frame and properties closer to urban locations have performed better than those in more rural areas, according to the report.
Prices in Bristol, for example, have risen by 7.4% annually while prices in Cheltenham are up by 6.4% over the same period. Price growth in Edinburgh is also outstripping that in the wider prime Scottish market.
The report explains that access to schools and transport hubs are among the attractions of more urban markets, especially those within commuting distance of London, although the increasing opportunities for remote working over the last decade has extended the traditional commuter zone for those who can be flexible in the way they work. The price differential between London and country homes has also encouraged people to make a move from the capital. Nearly a quarter of Knight Frank country home buyers in 2017 who purchased a property valued above £1 million made the move from the capital. This trend is expected to continue, especially in light of the more moderate price performance in London.
The report points out that there are pockets of strong activity in the country market, but a combination of macro-economic and political factors mean the underlying environment is more uncertain and prime residential markets in the UK, especially for homes valued at more than £1 million, have had to cope with considerable regulatory change over the last five years.