Taylor Scott International News
Prime commuter housing markets are set to outperform prime London in the five years to 2020, according to new research from international real estate advisor Savills. Overall the relative value offered compared to the capital is likely to underpin medium-term house price growth, the five year UK prime housing market report says. However, short term growth prospects are likely to be hampered by the combined impact of stamp duty, mortgage market review and a slow prime London market. The price gap between property in London and its commuter belt indicates the potential for significant growth once the ripple effect is restored, it explains. Prime London property prices are 36.8% above their 2007 levels, compared to a 6.6% rise in commuter areas over the same period. Consequently, the prime housing markets in London suburbs, inner commuter, up to 30 minutes train journey to London, and outer commuter up to 60 minutes, locations have the strongest growth prospects over the five years to 2020, at 24.5%, 24% and 23.4% respectively. However, the report explains that these prime housing markets in the commuter zone markets are dependent on movement in the prime London housing markets, which is only expected to occur after they acclimatise to a new tax and regulatory environment, allowing the fundamentals of wealth generation, both domestic and global, to translate into restored demand. This is expected to start to take effect in 2017, with trend rates of price growth returning from 2018 onwards to deliver five year price growth of 21.5% in prime central London and 18.2% growth in other prime London markets. Across the rest of the country prime housing markets are expected to be driven by a preference for city and town locations and strengthening local economies. Scotland is seeing a similar predilection for metropolitan areas, but all markets over £750,000 are being constrained by Land and Buildings Transaction Tax to some degree. ‘We expect the trend for urban living to continue as London buyers seek out vibrant locations where they don’t have to sacrifice the convenience of living close to shops, restaurants and leisure facilities,’ said Sophie Chick, Savills research associate director. ‘Positive sentiment for cities in the north of England is also being bolstered by talk of a northern powerhouse, despite the proposals being some way off,’ she explained. ‘While the prime property market is continuing to adjust to a new fiscal and regulatory environment, wages are increasing, interest rates are still low and there is political certainty for the next five years. Under these circumstances, we expect prime property to return to long term trend rates of real price growth in 2018,’ she added. Taylor Scott International
Taylor Scott International, Taylor Scott
