Hugh Wade-Jones is director of Enness Private Clients
Despite various naysayers claiming that the prime property prices are beginning to plateau the latest survey results by PrimeLocation.com suggest this is anything but the case.
The website’s latest index shows that premium property values have soared all across the country disproving the notion that it is only London’s high-end residences that continue to enjoy healthy price appreciation.
The capital may well be the strongest performing region with a 16.5% prime price increase in the past 12 months but the UK high net-worth rise sits at 3.3% showing the strength in depth of the top tier of the market.
In fact there were only three areas of the UK that didn’t experience some sort of prime property growth spurt – Scotland, the North East and Yorkshire Humberside.
In contrast to the wider market where asking prices are rarely being met and are often undercut by thousands of pounds the prime sector has seen asking prices reach record levels for each of the past five months.
With a limited supply of truly prestige properties available and a seemingly unending procession of foreign buyers flooding into the UK market and London in particular sellers are having their expectations more than met.
Although many of the high-profile prime properties are in swanky enclaves of West London the prime boom in the capital is by no means limited to that point of the compass with Haringey, Barnet and Southwark among the top-performing boroughs and areas such as Camden and Hackney – not always associated with glitz and glamour – not far behind.
Although many of the most recent wave of prime property buyers are foreign nationals looking to take up residence in London to escape suffocating economic and political conditions in their native countries, those looking to buy UK property as an investment are also attracted to the rapid rate of appreciation.
By PrimeLocation’s calculations, the prices of London’s most expensive homes are rising by £22 an hour which is not to be sniffed at, particularly in a climate where the interest rates on savings accounts are so paltry.
The aggressive rate at which prime property is appreciating in value will inevitably calm down at some point but while such huge demand remains – particularly from overseas investors – it is hard to see any such levelling off occurring soon.
Indeed with regions outside London seemingly behind the capital on the prime property value curve it stands to reason that the provinces could still enjoy something of an Indian summer even once prices in London start to relax.
It was predicted in some quarters that the Stamp Duty hike imposed on properties worth more than £2m would take some of the wind out of the prime market’s sails but this doesn’t seem to have materialised.
Ironically the change of leadership in France and the imposition of draconian tax measures for the wealthy there have seen a number of French buyers seek refuge in London.
If a week is a long time in politics it tells you just how interminable a few months can feel when we’re suddenly talking about London as a seemingly favourable destination for wealthy individuals after all the hand-wringing among high-net worth house buyers immediately after the Budget.
There will always be bearish forecasters looking to be the first to predict the decline of any market but I suspect the prime property doom mongers will have to wait a good while yet.