Strutt & Parker’s UK data for the second quarter of 2014 shows that median house prices were up by 4.2% to £187,500 across England & Wales on last year – but that median prices in Scotland jumped by a more impressive 8.0% to £135,000 in the same period.
With a number of potential headwinds slowing the market, including the upcoming General Election, the Mortgage Market Review, talk of interest rate changes and the Scottish Referendum, the figures are rather surprising, especially where Scotland is concerned.
Stephanie McMahon, Head of Research at Strutt & Parker, comments: ‘Interestingly and somewhat counter-intuitively, Scotland is not showing a slowdown through the data; normally markets slow down due to uncertainty and on that basis we would have expected Scotland to pick up in the latter half of the year – at the moment it seems to be bucking the trend.’
Greater London remained the strongest performing region with prices up 14.9% to a median house price of £365,304 – whilst the North East saw the weakest performance with a decline of -2.3% to a median price of £120,250.
As part of the report, Strutt & Parker also analysed the behaviour profiles of its buyers and sellers who sold or purchased homes over £2 million outside of London. In Prime Central London, nearly 50% of buyers move from somewhere else in London. In the UK buyers from London make up nearly 14% although this figure jumps up to 20% for properties over £2m, the research found.
James Mackenzie, Partner in the Country Homes Department at Strutt & Parker, said: 'Last year has shown a distinct increase in international buyers, including expats as well as foreign nationals who own houses in London and have decided to settle with stronger roots in the UK.'
‘They have stretched out to the Cotswolds and Hampshire specifically. We are also starting to see a significant increase in enquiries from London-based British purchasers looking to move out to the country.’
Strutt & Parker are predicting 8% growth for residential house prices across the UK in 2014.
Stephanie McMahon, Head of Research at Strutt & Parker explains: ‘Improved economic foundations would certainly suggest that prices will continue to rise over the next few years, while the biggest perceived uncertainty surrounding the property markets over 2014 to 2015 will continue to be the looming election.
This uncertainty will be most significant around the £2m price bracket due to the potential change of government and associated possibility of mansion tax. We therefore expect that price growth during the remainder of 2014, and even more so in 2015, will be sensitive to prevailing political press and expectations.’
Michael Fiddes, Head of Regional Residential Agency at Strutt & Parker, said: ‘With election fever mounting, this does not appear to be affecting the market outside of London as lack of stock continues to drive the market. The autumn of 2014 may in hindsight be a canny time to be selling.’
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