The prime regional markets beyond London are beginning to see the first signs of recovery as price growth returned to the markets of South East England in the first three months of 2012. This means during the first quarter of 2012, regional prices increased on average by 0.6% overall, the first quarterly price rise in a year.
Despite this small uplift in prices, prime values across the UK are on average -2.8% below where they were in March 2011, reflecting a slower market in 2011. However, across the different prime regions, it is a mixed picture.
This is the first clear signal of a ripple of wealth out of the capital, which traditionally indicates that the prime markets further afield should begin to bottom out.
However, the return to price growth will take time to feed through
the market; with markets currently more fragile outside of
South East England.
The growth recorded in the first three months was mainly confined to the South East where values rose by 1.5%, driven by the equity-rich sellers of London homes who started to make the move to key commuter hotspots. There was an identifiable increase in buyer numbers from London into the Home Counties with 43% of buyers coming from the capital in January to March, compared with 36% in the final quarter of 2011.
Though not replicated across the whole market, some key hotspots have shown sharp first quarter growth, prime property in Henley and its surrounding area has grown by 5.2%, Guildford 4.0%, Harpenden 4.5% and Esher by 3.9%.
The steepest falls are still being seen in the Cornish second home hotspots. The prime Cornish market fell -2.3% in the first quarter and is down -18.7% year on year, remaining some -28% below peak. By contrast, the more accessible prime Devon market is flat year on the year after adding 2.3% in the first quarter.
Country house market
The prime country house market over £2 million remained roughly level across England with small falls experienced in Scotland.
As experienced in London, this ultra prime market has previously outperformed the rest of the prime markets with values recovering more in line with London prices, although they still stand nearly 10% below their former peak.