Tuesday, 22 June 2021

Boom in prime market to continue

Boom in prime market to continue

A REPORT on the UK’s prime residential property market has identified South Oxfordshire as the epicentre of resurgent activity.

The research by Savills found that sales of £1 million-plus properties agreed in the period from the start of June 2020 to the end of April 2021 were 184 per cent higher than the same period a year before.

With the extended stamp duty holiday set to start tapering at the end of this month, some have wondered if this will act as a brake on activity.

But Lucian Cook, the head of residential research at Savills, says the patterns of market activity seen over the past 12 months suggest that the top end of the prime market is far less reliant on stamp duty relief than the segment of the market between £500,000 and £1 million.

He said: “We believe two factors will shape the prime markets over the remainder of this year and into the next. First, the level of buying activity over the past 12 months has created shortages in the amount of property available to buy across large parts of the market.

“This has resulted in an imbalance between supply and demand that we expect to underpin prices across the prime family house markets through 2021.

“Second, the vaccination programme and the consequential relaxation of social distancing will start to impact on buyer and seller behaviour.

“On the one hand, our client survey results indicate that this will actually increase buyer commitment over the medium term.

“But it is also likely to bring more stock to the market, particularly from downsizers and others who were reluctant to sell while risks from Covid were high.

“That should gradually ease some of the supply constraints we currently see.

“Additionally, some of the changed housing priorities are likely to gradually dissipate, rebalancing some of the demand between London and the country.

“More specifically, easing of international travel restrictions is expected to be the catalyst for a long overdue price recovery in central London that was put on hold by the pandemic.

“In April, some £382 million was spent on £5 million-plus property in London — more than 60 per cent above that normally expected at this time of the year. So as one market starts to ease, another appears set to leap into action.”

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