Prime property prices in regional England and Wales fell in fourth quarter of 2018
Prime regional property prices in England and Wales fell in the fourth quarter of 2018 but the North of England has seen annual growth, the latest country house index shows.
Overall, prime regional prices fell by 0.6% in the 12 months to the end of 2018, the first time the annual changes has fallen for 18 months, according to the Knight Frank index, this was largely due to a 0.9% fall in the final quarter of the year.
Looking ahead the outlook is positive and Knight Frank forecasts price growth in regional prime markets of 0.5% in 2019 and cumulative growth of 8.2% between 2019 and 2023.
The index report points out that demand, as measured by prospective buyer registrations and viewings, is on a par with levels seen a year ago and above the level seen in 2015.
The North of England was the strongest performing region in 2018, with an annual price growth of 1.3% and townhouses have been the strongest performing property type, with a growth of 24% over the past five years.
It also points out that pent-up demand is forming across prime regional markets while uncertainty over Britain’s impending departure from the European Union weighs on pricing.
This means that recent performance reflects a general lack of urgency among both discretionary buyers and new vendors, with uncertainty over Brexit and the political future of the UK now at the forefront of their minds, the report says.
The firm’s sales negotiators believes that sellers and buyers are choosing to sit tight and wait for clarity as the March 2019 deadline for leaving the European Union nears and the report adds that where sales are being achieved they are generally taking longer to complete, particularly in the south of England.
The index report reveals that in 2018, the time taken to sell a house valued above £500,000 in the South East has increased by 23% compared with 2016 while in the East of England the increase is 28%.
It also shows that there are variations in price performance depending on property type and location. At a regional level, for example, prices dipped by 3.1% annually in prime markets across the North Thames and Chilterns. In the North, annual price growth was positive, albeit only at 1.3%.
Price movements also varied by property type, with longer term performance highlighting some stark differences. Manor houses, for example, have reported modest growth of just 0.8% during the past five years, compared with growth of 19% and 24% respectively for cottages and townhouses over the same period.
The rate of annual growth in the prime country market has averaged less than 1% since the middle of 2016. Against the backdrop of Brexit negotiations, Knight Frank says that it’s likely that these current market conditions will continue in the short term.
‘Both buyers and sellers have become more cautious as uncertainty surrounding the UK’s departure from the European Union has intensified and values in prime markets have slipped on an annual and quarterly basis as a result. This this hasn’t coincide with a fall in demand, however,’ said Oliver Knight, Knight Frank residential research associate.
‘New buyer registrations and viewings are on a par with levels seen a year ago and above the level seen in 2015, which may suggest that pent-up demand is forming and could be released once political uncertainty recedes,’ he explained.
‘Pricing is expected to remain subdued as we head into 2019, though the relative value on offer in most prime regional housing markets should help underpin demand. Over the last five years, for example, manor houses have reported growth of just 0.8%, compared with growth of 19% and 24% respectively for cottages and townhouses over the same period,’ he added.