Move to the Country
Falling property values in the UK’s prime regional residential market during 2011 opened the gap between London and regional house prices to its widest ever, making the best regional property look good value compared to the capital where values rose throughout the year.
The latest market report from Savills shows that prices across the UK’s prime markets fell by an average of 3.3% against an increase of 8.7% across all prime London and 14.1% in prime central London. Very few areas outside London ended 2011 in positive territory. Only locations such as Sunningdale, Weybridge and Henley saw price rises, in the region of 2%.
Savills says that this was supported in the latter stages of the year by international equity, and makes this niche area of the country, its very top end in particular, pretty much the only location currently able to perform in line with prime London.
In general, the South East lost around 2% of its value as the traditional fuel of these markets, City money, was largely reinvested in prime London. ‘It’s not that domestic owners have stopped trading up, but they are trading up within London and the flow of City money that would normally be the lifeblood of markets such as Guildford is staying put,’ said Lucian Cook, director of Savills residential research. ‘The result is that the country is now looking better value than for many years, a factor that we would normally expect to stimulate buying activity,’ he added.
Realistic pricing based on current market conditions is the key to stimulating these markets. Set against the backdrop of a potentially volatile economic recovery only the best houses will command competitive attention in spite of the lack of stock and low transaction levels. Finding and securing the right home will take careful investigation and the application of time and energy. Nevertheless the South East, and especially the perennially popular towns, should outperform the wider market over the course of the next five years given a lesser reliance on mortgage finance and the natural ripple effect of housing equity from the capital.
If you have been thinking of escaping the smoke, perhaps now is the time to cash in on the London market and move to the country.
