Urban country markets continue to outperform
Urban areas within the country market are seeing house price increases that outstrip overall price growth in the wider country market.
New research from estate agents Knight Frank analyses price growth and market performance of four key towns and cities; Bath, Bristol, Oxford and Cheltenham and reveals that the areas have weathered the 3% stamp duty charge and the pre and post referendum result influence well.
Cheltenham leads the way, with annual price growth of 8.6% driven by an imbalance between supply and demand. Prices went up by 2% in the last quarter and by 3.9% in the first six months of the year, three times the national average increase of 1.3% over the first half of 2016.
In its market insight commentary on Cheltenham, Knight Frank said: Figures show a 16% increase in the volume of new buyer registrations in the second quarter of this year versus the same period in 2015. There was also a 14% rise in viewings over the same time.
“However, against this backdrop of strengthening demand, supply has been subdued. Our analysis shows there were 19% fewer prime properties available for sale across Cheltenham at the end of June year-on-year,” the report says.
Bristol has seen annual house price growth of 7.4% and the last three months to June saw prices rise by 1.4%, again outperforming most of the market.
The growth is again linked to rising demand and a lack of stock but also because of infrastructure improvements that will see the opening of a new train line. There has been a 17% increase in the number of new buyer registrations in the second quarter compared to the same period last year and a 19% rise in viewing over the same period.
House price growth has actually accelerated in the first six months of 2016, including the run-up to Brexit, in Bath, though the analysis reported a slight dip just before the vote.
Against annual price growth of 4.8% in the 12 months to June 2016, prices went up by 3.1% in the first six months of this year.
Knight Frank said: “Confidence among buyers and vendors is high, though it saw a bit of a slowdown pre-Brexit. “Outperformance in Bath suggests that the city market has proven to be resilient in the face of such concerns. However, while prices have risen, it has not been immune to these economic and political headwinds.”
The growth in house prices in Oxford has been slower, but comes after several years of very strong price increases. Prices have risen by 0.3% in the last quarter, by the same amount over six months and by 0.7% over the last year.
Knight Frank said: “The market is still active, but the stamp duty increases have had significant influence on the prime market.”
However, the shorter commuting times has seen a rise in the number of buyers from London with 25% of all prospective buyers registering with Knight Frank Oxford office in 2016 based in London, up from 19% in 2015.
Oliver Knight, associate, Knight Frank Research, said: “Since the financial crisis, prime town and city markets across the UK have consistently outperformed their more rural counterparts in terms of price growth, driven by demand from buyers for homes in prime urban locations which offer excellent state, private and grammar schools, good transport links and plentiful amenities.
“Londoners, who may be seeking more space and a balance between city and country life, are also able to take advantage of the price differential between property values in the capital and those elsewhere in the country. This means those selling a property in London for one in a different town or city will get more bricks and mortar for their money.”