Buyer demand is building and could translate into a boom in transactions once the Brexit uncertainty clears, Savills claims.
The agent has reported that new buyer registrations for properties worth more than £1m were up 36% in central London and 11% across the rest of the capital in the first three months of the year.
Savills said it registered 16% more buyers annually in the first quarter, with viewings up 20% in its regional and country house markets.
But given the level of political uncertainty, this hasn’t translated into increased market activity, Savills said.
Lucian Cook, head of UK residential research at Savills, said: “There is a sizeable, growing pool of demand developing amongst buyers adopting a wait and see approach until the outcome of Brexit negotiations becomes clearer.
“Whichever way the Brexit pendulum swings and whatever the fundamentals of demand that underpin the prime housing markets, it could be some time before we have a clear understanding of what lies ahead – both politically and economically.
“This demand could translate into an uptick in transactions once there’s clarity, but that is unlikely to be matched by price growth in the short term.”
Savills data for the first quarter of 2019 shows that prime London properties recorded the smallest quarterly fall in house prices since the EU referendum, down 0.3%.
Average prices in prime London areas were also down 2.5% annually and are still 11.9% below their 2014 peak, the agent said.
The strongest performing regions in the first quarter were those furthest from the capital, Savills said.
Modest price growth was seen in the Midlands and North of England, where values ticked up by 0.7% year-on-year, with the city of Edinburgh remaining the star performer showing annual price growth of 7.4%.
This meant that Scotland was the strongest regional market, with values up 2.3% on average.
Cook added: “While higher rates of Stamp Duty contribute to buyer caution, it is far less an issue than Brexit, having largely been priced into values before the referendum.
“Anything that gives greater certainty is likely to release the brakes on turnover. But regardless, the market is expected to remain price sensitive over the remainder of the year.”
Comments (3)
Clearly James Wilson is better informed than Lucian Cook, head of UK residential research at Savills. Or perhaps he is just a bit ignorant of the London property market. I would put my money on Savills being better informed.
What a load of absolute nonsense. Firstly, Brexit has had almost no impact on the drop in London prices – it is purely a function of prices being way too high. Secondly, we are only months away from a Corbyn Government now. Once John Macdonald is in Number 11 let’s see how the “£1 million plus” market does. People selling now are going to be very glad they did while prices are still inflated.
I don’t think that Brexit has had any impact upon housebuying in Newcastle Upon Tyne. The plan for the city is 21,000 new homes over the next five years. Our Conveyancing department becomes busier and busier. Our city grows its population again. We are a different place, almost unrecognisable, from the days when the shipyards closed.