Confidence Returns to Prime Regional Property Markets Amid Improved Stability

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Prices Flatten Out Suggesting Greater Stability

According to the latest research from Savills, confidence is returning to UK prime regional property markets outside of London.

In their latest quarterly round-up of prime regional property markets, Savills states that values have flattened out following five consecutive price declines, suggesting greater stability in the market.

According to the report, buyer confidence is increasing, with annual price falls eased to -3.8% across all prime regional markets. This is more promising than last quarter’s figure of -4.7%, implying an improving investor environment for UK buy-to-let investment.

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Urban Areas Outperform Rural Locations

Savills’ analysis shows that demand for prime properties is greater in urban locations. This shows trends turning away from the race for space and greener locations that dominated during the pandemic. According to Savills’ March survey, buyers prioritise proximity to a train station (30%) and shops (38%) when searching for the perfect property.

With this emphasis on amenities in mind, urban areas continued to outperform rural areas in the first quarter of 2024. Prime property in cities such as Edinburgh, Glasgow, Bath and Oxford experienced a 0.6% rise in value, while rural locations saw a decline of -0.2%. Towns (0.1%) and villages (-0.1%) were also outperformed by cities.

According to Savills, prime city markets typically have smaller, lower-value properties that tend to attract young professionals and other needs-based buyers. More of these buyers have returned to the market as mortgage costs have improved.

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Activity Levels On the Up Across All Price Bands

Spring is usually a busy time for the UK property market, and as predicted, activity levels have improved in quarter 1, thanks to more positive sentiment.

During Q1 2024, agreed sales in the UK were up 19% compared to Q1 2023 across all price bands. New instructions also increased by 12% and 8% above pre-pandemic levels. Savills states that this suggests a return of confidence in the market and hints at recovery after uncertain times.

Savills’ agent survey also showed a rise in stock levels, with 88% of agents reporting more stock over the past three months, meaning buyers in the current market will have more available properties to choose from.

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What Will Prime Property Markets Look Like in 2024?

Savills predicts that as outside economic pressures become more stable, the prime regional markets will continue to improve. They believe prices will recover in the medium term, with a projected 19% price growth leading up to 2028.

However, they state that buyers are likely to stay cautious until rates are cut by the BoE, despite mortgage rates falling quicker than expected and falling inflation. As the interest rate improves, buyers reliant on mortgages will return to the market in more robust numbers.

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Author

Jessica Ferris

Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.