Prime property prices forecast to rebound in 2018

Knight Frank says demand has remained steady over 2017, with figures showing a 1.2% increase in the number of new prospective buyers registering their interest in buying a home between January and November, and a 4% increase in the number of viewings conducted over the same period.

This modest rise in demand has also coincided with a lack of new stock being offered for sale, with agents noting that this has been one of the most challenging aspects of the market in 2017.

Higher rates of stamp duty, a slowdown in economic growth and wider political uncertainty mean that vendors have been prepared to take a ‘wait and see’ approach.

An analysis of listings data shows there were 6.8% fewer homes worth over £1 million launched onto the market in England and Wales, excluding London, so far this year compared with 2016. Above £2 million, the fall was even more pronounced at 16.9%.

East Midlands, West Midlands and Yorkshire were the only regions to see an increase in the number of £1m+ homes put up for sale in 2017 compared with the previous year, in the Midlands this coincided with a pick-up in price growth, especially in urban areas. In the South East, which is usually home to the highest number of £1m+ sales outside of London, there was a 9% fall in new prime listings.

Sales volumes outside of London rose by 4.9% year-on-year between January and November 2017, however any continued decline in stock levels at the top end of the market could weigh on transactions into 2018.

Overall, Knight Frank is forecasting price growth in prime markets across England and Wales of 1.5% in 2018 and of 2.0% in 2019.

Oliver Knight commented: “The number of new homes being offered for sale in prime markets outside of London fell in 2017 compared with the previous year, despite indications that demand remains robust with a pick-up in both new prospective buyers and viewings.”