Prime property prices on the up

25th July 2011

The latest Prime Index from property website PrimeLocation.com shows that asking prices for "Prime" properties (the top 25% of the market by value) in the UK have increased by almost 3% since the start of the year, pushing the average prime asking price up from £454,276 to £467,310.

The majority of this increase, however, has been in the last three months; the average increase from January to March was just £478 (+0.1%) but jumped by £12,555 over the past quarter.

Over the same period, asking prices for "Prime Platinum" properties – the top 10% of the market by value – also rose by 3% or £19,501 – to an average of £649,083.

Nigel Lewis, property analyst at PrimeLocation.com said: "Following a quiet start to the year, the UK prime property market burst into life in April.

"There are a number of factors which could be at work here beyond seasonality, notably the weak performance of Sterling against the Euro and many other currencies over the first half of the year which has made the UK continue a very attractive market to foreign buyers. The prospect of interest rates rising has also diminished, meaning that the cost of mortgages will remain low for those who can afford it. Finally, since the earthquake in Japan global equities have shown signs of instability, encouraging people to invest in bricks and mortar again."

Leading the regional charge in Prime property prices were the North East and South East of England, as well as Scotland, which grew by 7%, 5.4% and 4.8% respectively over the course of the first half of the year. Prices in London, meanwhile, increased in line with the national average of 2.9%.

Meanwhile other figures also out today show that the growth in property values around Olympic areas are outstripping the rest of the UK.

Property website Zoopla.co.uk says property prices around Olympic sites have gone up 11.9% since the games were announced in 2005, outstripping average UK house price growth of 7.2% over same period.

More than £30bn has been added to the total value of residential properties located in close proximity to the UK Olympic sites since the announcement, with £6.4bn in added-value to house prices in East London alone. The budget for delivering the Olympics is currently on target at £9.3bn with exactly one year to go.

Outside London, properties near seven of the ten major Olympic venues have recorded noticeably higher price growth than the surrounding areas. For example, in Lee Valley, Hertfordshire, where the White Water Centre has been developed for canoeing events, house prices have risen 12% since the announcement compared to 7.2% growth on average in the region.

Nicholas Leeming, business development director of Zoopla.co.uk, said: "There's no doubt that the redevelopment to a number of areas across the UK as a result of the Olympics has had a positive impact on property prices."

More from Mindful Money:

Property: Asking prices starting to fall as buyer demand slides

House prices: Up, down, whatever? Is there just too much data around to really know

Reasons to be cheerful about the UK housing market part one,two but sadly not three!

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