Online House Hunter: Spotlight on prime markets
THE expected wisdom is that the revival in the housing market in London will spread out to the regions and within a year or two everything in the UK housing markt will once again be rosy. So with the prime London market increasing over the last quarter (according to Savills) by 8.7 per cent it’s a tad worrying that UK prices fell by 3.3 per cent.
The growth in London is due in part to London being seen as a good investment by international buyers who are also wooed by the weak pound.
“We would normally expect to see a flow of equity out of London in the wake of price recovery in the capital, but that is not yet happening,” says Lucian Cook, director of Savills residential research. “It’s not that domestic owners have stopped trading up, but they are trading up within London and the flow of City money that would normally be the lifeblood of markets such as Guildford is staying put in Parsons Green.”
Cornwall, for example, saw values fall by around 16 per cent during the course of 2011 but even the south east as a whole lost around two percent. Savills also highlight the north-south divide playing its part with prime residential prices in the Midlands and the North 24 per cent below their 2007 peak. And they expect this “under performance” to continue throughout 2012.
The plus-side of this, of course, is that prices in the country prime market should represent good value for money. And Savills also expect prices in the prime property market to outperform mainstream house prices over the next five years – not least, of course, because this market has less reliance on mortgage finance.
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