Strutt & Parker, one of the UK’s largest independent estate agents, has seen demand for property in the UK increase significantly in recent months, but the company reports that the housing market in prime central London ‘remains static’.
Strutt & Parker’s quarterly residential report for Q2 2017 highlights the contrasting property markets in London and the wider country, with a shift in buyer sentiment over the past quarter.
Guy Robinson, partner, head of regional residential agency at Strutt & Parker, said: “We have some excellent stock on our books and new applicants are up nearly 5% year on year.
“When we look at the average number of applicants we have per property across the UK, it’s higher than it has been at any point since 2012.
“More prospective buyers lead to higher viewing numbers, which should generate an increase in sales, which is very encouraging.”
In contrast, quarterly figures show that London as a whole suffered a significant price decrease of 2% during the second quarter of the year.
Although the number of homes changing hands in prime central London increased by 24.3% compared with the same period last year, transactions actually decreased by 3.5% in comparison to the previous quarter and is still 22.7% below the five-year average for Q2.
Nevertheless, it is worth noting that London house prices are currently 55.8% above the 2007 peak, despite the recent dip in values.
The housing market in prime central London has been adversely affected by Brexit and stamp duty changes, but in comparison, the market for the rest of the UK remains reasonable, despite economic and political uncertainty, according to Strutt & Parker, which was this week acquired by BNP Paribas Real Estate.
Charlie Willis, partner, head of London residential agency at Strutt & Parker, commented: “Transaction levels in prime central London, across all price bands, are up on this time last year and this uptick in volumes is very welcome. However, the values being achieved are lower than they have been – savvy buyers are choosing now to take advantage of current pricing.
“Whilst one might have expected more transactions from overseas buyers due to the currency benefits currently at play, domestic buyers are the most prolific. We expect prices to remain flat for the rest of 2017 and into 2018 which we hope could spur further activity.”
Strutt & Parker, alongside its economic forecasters Volterra, is forecasting 3% growth for house in prices this year across the UK, but expect home prices to remain flat in prime central London as a best case scenario, with downside risk at -5%.
Vanessa Hale, partner in research at Strutt & Parker, said: “Surprisingly the UK economy has been more resilient than anticipated considering the political uncertainty over the past 12 months. As consumer and business confidence begins to wobble, supply for new housing is still extraordinarily low and demand has not significantly dipped. Therefore, even though the market may now be faced with increased inflation and weak household income growth, cheap credit conditions remain and consequently properly priced correctly will continue to transact.”