Post-election confidence boosts Prime market

Prime Platinum property increased by 1.1% to £639,536 this month, with substantial annual growth of 4.1% – double the rate of annual growth in the normal market, which stands at 2.0%.

The capital experienced high monthly price growth in the Prime market, with a 4.0% increase in June, taking average prices up to £1,146,755. All ten regional Prime markets also saw asking prices increase, with Scotland (1.7%) and Yorkshire and the Humber (1.5%) the top performers.

In addition to rising prices, stock levels are also on the increase in the Prime market. Sellers, encouraged by rising prices and increased buyer demand, have come out in force this month to put their properties on the market. The supply of Prime stock available increased by 8.7% between May and June, and is now 70.9% higher than a year ago. This follows the trend in the overall UK market which saw a 9.3% increase in properties for sale this month.

Andrew Smith, Research Director at Primelocation.com, comments: “The introduction of the Lib-Con government has acted as a tonic for the Prime property market. Confidence has returned in the month post election, as decisive action has been taken to get the economy back on track and the deficit under control and, following a period of political uncertainty, both buyers and sellers are now back out in force.

“Prices remain strong, and increased stock should help meet the rising demand that we are witnessing, with a 1.0% increase in unique users on our site in the past month, giving a positive outlook for the future of the markets.

“Despite concerns that the emergency Budget may have clouded the horizon, the property market did not fare as badly as was feared. While the new higher rate of CGT may deter higher earning investors from selling current investments and making new property purchases, the country’s huge deficit clearly needs to be dealt with and no sector, the housing industry included, could reasonably expect to escape the pain of the cuts.

“As ever, many of the wealthy UK and overseas buyers, currently active in the Prime property markets will be largely unconstrained by the financial impact of the tax changes. However, it will be interesting to observe the impact of the 5% stamp duty threshold when it comes into force for £1million plus properties next year, on top of the plethora of other new taxes and spending cuts. Middle class homeowners may then avoid the cost of moving, dampening the market for properties around the £1million price bracket.”

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