Appetite for property remains but turmoil impacts city

The UK market for prime properties is outperforming the wider housing market, with the number of buyers actively contacting agents about specific properties worth over £1m, 58 percent higher than property below £1m, according to analysis of 261,000 properties advertised for sale on propertyfinder.com.

The activity index tracks the number of formal expressions of interest from buyers, regarding each property for sale, and is a forward looking indicator of housing market activity over the following months. The 
data suggests activity levels are set to improve.

Buyers who have the financial means, and particularly those who are able to make the biggest savings in a down market, are still seriously looking to buy property. In addition to the analysis of the property listings, the website surveyed 2,056 people last October for their views on the market. Despite expecting house prices to fall by an average of nine percent over the next year, 60 percent of all respondents stated that now was a good time to buy property. It is clear that buyers of high-end properties in particular have been taking advantage of lower prices and greater bargaining power and are actively looking for property. Those under £175,000 are seeking to take advantage of the temporary stamp duty holiday.

Nicholas Leeming, director of propertyfinder.com, commented: “Clever buyers can now find some real bargains; and at the top end of the market the cash savings to be made are much higher, so this group tends to be more motivated in a downturn… our figures suggest the top end of the market is likely to outperform in terms of transaction volumes compared to level of stock for sale. With interest rates now on a sharply downward path, we expect transactions of property to begin to pick up again from current historic lows.’

However, where London was once the prime property capital, interest in high priced properties in both Greater and Inner London has slowed in reaction to City turmoil. Inner London continues to have by far the highest stock of homes worth over £1m, but there are far fewer interested buyers per property than in every other region in the UK as buyers hold back.

21 percent of people think that City job losses are going to be responsible for further dramatic house price falls – with this group expecting house prices to decline by an average of 13 percent over the next twelve months, more pessimistic than the average UK respondent. In addition, London and the South East fear the impact of an exodus of rich City expats selling their homes and pushing down prices – more than 50 percent of those who believe that wealthy foreigners will sell up and leave are located in these two regions. 

Nicholas Leeming said: “London and the South East are suffering as a result of what is happening in the City. Job losses are severely denting confidence and the economic dependence on one ailing sector has slammed the brakes on what was previously a thriving prime property market. Buyer interest in £1m plus properties in Kensington and Chelsea is nearly 10 percent below the national average. Now it is regions that are less exposed to financial services that are attracting buyers of more expensive properties. There is a greater shortage of supply of expensive property outside the capital and the South East, so there is less choice for wealthy buyers, but relatively speaking, demand is holding up much better too. Places such as Wrexham possess a new appeal for the premium buyers. The rich are still buying property, but just like everyone else, they are looking to get more for their money.’