UK prime prices flat in Q2 but activity rising
There was little movement in terms of price growth for prime country homes during the second quarter, but activity levels were robust compared with the same period in 2016.
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- Prime country prices rose by 0.1% between April and June
- On an annual basis, property values were 0.2% higher
- Prime properties in town and city markets continued to outperform, rising by 1% in Q2 and by 1.5% annually
- Knight Frank forecasts are for a 1.5% increase in prime prices in 2017
Prime country prices were largely unchanged between April and June 2017, rising by just 0.1%, according to our latest property market report. On an annual basis, property values were 0.2% higher on average.
But while values have been largely static over this time, an analysis of Knight Frank housing market data points to a more active market, albeit one that remains price sensitive.
Knight Frank figures show prime sales volumes rose by more than half between April and May, compared to the same period in 2016. The comparison flatters this year's performance, as the 2016 data was adversely impacted by the introduction of the additional rate of stamp duty, but even against the level of market activity in 2015, sales volumes were still higher by 29%.
A pick-up in sales volumes in the past few months also suggests that prime markets outside of London are weathering any political and economic uncertainty as a result of the General Election, as well as the ongoing discussions surrounding Brexit.
The figures also reveal some wider trends, with town and city markets continuing to outperform their more rural counterparts (figure 2, below).
As we have noted in previous updates, a shortage of good prime housing stock continues to act as a barrier to further growth in the market. If sustained, this could put upwards pressure on the market over the remainder of the year. Knight Frank forecasts are for a 1.5% increase in prime prices in 2017.
Read the Prime Country House Price Index in full.