New figures show that for the first time since the financial downturn, the UK’s prime regional property markets slightly outperformed London.
Research from Savills shows that prime regional property increased by an average of 3.2% in 2014.
Property experts at Savills suggest that changes to Stamp Duty had an effect on the market’s performance.
‘For all buyers below £937,500, stamp duty rates have fallen and this is reflected in levels of annual price growth. Above this margin, the increased rates of stamp duty resulted in an adjustment in values at the top end of the market in the final quarter, most notably in the higher value extended commuter belt of London,’ Lucian Cook, director residential research Savills commented.
Properties in London’s commuter belt (up to 1 hour outside of the Capital) have seen prices surpass the highs recorded in 2007.
However not all regions have bounced back as quickly.
Average property prices in Scotland remain over 20% below their 2007 peak, 10% below in the South of England and properties in the Midlands and the North remain 14.8% below pre-crisis levels.
Stamp Duty reform
Changes to Stamp Duty has had a knock on effect on the UK’s property market and with the general election just a few months away; the market has experienced signs of a temporary slowdown.
‘The greatest impact of the stamp duty increase was seen in the most valuable markets of prime central London, which have seen the strongest price growth in recent years,
‘It will take time for the effect of the Autumn Statement stamp duty changes to become clear, but early signs are that the additional cost is predominantly being borne by sellers through price adjustments similar to the amount of extra stamp duty,’ Cook continued.
‘There is evidence some of the froth had come off of the market before the Autumn Statement. Our analysis suggests that even without the stamp duty changes, values were on track to soften by around 1% in the final quarter of 2014, in part due to pre-election uncertainty around high value property taxation. The stamp duty changes took that adjustment to -2.6% on average,’ Cook added.