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Prime UK house prices hit pre global financial crisis high

Christian Fernsby ▼ | September 30, 2020
Values across the UK’s prime houses outside of the capital have topped their pre global financial crisis 2007 peak for the first time, driven by record levels of demand from those reviewing their housing needs after the experience of lockdown, according to Savills quarterly prime market indices.
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Though average values rose by a relatively modest 1.7% in the three months to the end of September, this was the highest quarterly increase since March 2014.

With prices increasing 2.6% year on year, values of prime regional property – broadly the top 5-10% of the market by value – are now a marginal 1.4% above their 2007 peak.

The biggest increases, 3.4% in the third quarter, were seen in the traditional £2m+ country house market, after a huge resurgence of interest post lockdown.

This has been led by the southern regions of England and Scotland, based on the excellent value it still offers.

Coastal properties have also been in high demand.

Values rose by 2.9% in the quarter (and 3.9% year on year) as a desire for lifestyle change, coupled with the summer’s travel restrictions, led to strong competition in this part of the market.

By contrast, average prime London values remained flat across the quarter - despite a resurgence in activity in the more domestic parts of the market.

Here, homes with a reasonable garden in locations such as Richmond, Wimbledon, Wandsworth Chiswick, Islington and Victoria Park , have been in the greatest demand meaning their values have risen by an average of 4.5% year on year.

Meanwhile, travel restrictions continue to constrain the prime central London market, bucking the trend of all previous downturns when the UK capital’s most expensive postcodes have led the recovery.

This said, the lack of available stock at the top end has resulted in a slight outperformance of the highest value homes .

In outer prime London, the value of property worth £2m or more increased by 0.5% in the quarter and by 2.4% in the last year.

And in central London, £10m+ property has risen in value by 0.2% in the quarter compared to a fall of -0.5% for those worth less than £2m.