Worries over Autumn Budget tax changes see Prime markets falter
Savills' head of residential research Lucian Cook says the positive effect of lower mortgage costs is being offset by pre-budget caution.
Savills says falling mortgage costs have seen outer prime London markets return to annual growth for the first time since December 2022 but warned that the impending budget is causing buyers to become more cautious within the prime market.
Prime property prices in outer London grew marginally over the past three months (+0.2%) with family houses popular among a younger demographic of wealthy homeowners, especially in areas such as Hackney (+1.8%) and Victoria Park (+1.2%).
Outer prime
But sales in Prime Central London fell by -0.7%, where 73% of buyers were concerned about Rachel Reeves’ likely changes to tax on 30th October.
Outside of London, prices of prime homes fell slightly (-0.5%), with downward pressure felt most in prime coastal markets where second home ownership is more common.
The prospect of further interest rate cuts has continued to support activity across both the prime and mainstream housing markets”
“A more competitive mortgage environment, supported by the prospect of further interest rate cuts has continued to support activity across both the prime and mainstream housing markets,” says Lucian Cook, head of residential research at Savills (main image).
“However, while we would usually expect the top end of the market to be the first to react to improved market conditions, concerns over what the budget may hold have made buyers more cautious, especially in the most discretionary prime markets.”
Outside London
Prime markets outside London are continuing to feel the effects of the reversal of pandemic trends, he says.
It means top-end properties in regional cities and towns, such as Sevenoaks, York and Edinburgh have fared better than those located in villages and other rural locations.
Across the prime regional markets, prices fell by -0.5% but those within the Midlands and North of England, and across Scotland rose by +0.3%.
Concerns though over council tax increases and potential greater exposure to capital gains tax have pushed down prices by -0.8% in the prime country house market.
