The UK’s prime regional and country house market held up better than expected in the first quarter of 2019 given heightened political uncertainty and fragile consumer sentiment, according to a new analysis. Average values remained unchanged in first three months of 2019 and fell by just 0.9% over the past 12 months, the latest report from international real estate adviser Savills shows. But performance varied between regions and value bands. All regions outperformed London, continuing a pattern seen since the Brexit vote and the strongest performing regions over the past year have been those furthest from London.

Modest price growth was seen in the Midlands and North of England, where values rose by 0.7% year on year, with Edinburgh remaining the top performer showing annual price growth of 7.4%. This meant that Scotland was the strongest regional market, with values up 2.3% on average. Price growth now totals 5.55% on average across the UK compared to falls of 11.6% across the prime London market. Regions closer to London saw values fall over the past year, a trend that continued in the first quarter.

In England prime regional cities which had seen strong growth in previous years have slumped, with prices down by 1% in Oxford, down 1.9% in Cambridge, down 3.1% in Bristol and down 3.5% in Bath with only Bristol seeing small gains in the first quarter of 2018 with a rise of 1.2%. In the market over £2 million, average values are now down 6.3% compared to their pre referendum level, with prices for the large country houses still on average 21% below their 2007 peak. Even in the high value hotspots of the Home Counties and Cotswolds, values remain 8.6% down, having slipped a further 1.1% over the past 12 months.

The private estates of St George’s Hill and Wentworth saw values slide a further 6.7% in the past year, although the report points out that this repricing has resulted in increased activity from buyers and developers who now see value in the market. ‘Across the board there is a market for well-priced stock from buyers sensing an opportunity to trade in a less competitive environment who are prepared to take a long term view of the market,’ said Lucian Cook, Savills head of residential research. ‘Brexit remains the biggest single constraint on the market, contributing to a lack of urgency among buyers, who will only commit when they perceive real value. A widening of the gap between buyers and sellers in terms of price expectations is also dictating the pace of the market, making it more difficult to put chains together,’ he added.

Savills points to a build-up of potential buyers, watching the market but adopting a ‘wait and see approach’ until there is greater clarity around Brexit. The firm registered 16% more buyers, with viewings up 20% in the first three months of 2019 than in the same period last year. ‘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,’ Cook concluded.

Author: Propertywire.com