Prime U.K. country house prices have been kept in check by political and economic uncertainties throughout 2017, resulting in a mere 0.4% increase year-over-year according to a Knight Frank index measuring the price movement of luxury homes outside London.
The annual marginal price gain was largely caused by a supply shortage, as most sellers decided to take a “wait-and-see” approach in the face of Brexit, the parliamentary election, the stamp duty increase and other market-driven events, according to Knight Frank’s Prime Country House Index released Wednesday.
“The number of new homes being offered for sale in prime markets outside of London fell in 2017 compared with the previous year, despite indications that demand remains robust with a pick-up in both new prospective buyers and viewings,” Oliver Knight, research associate at Knight Frank, wrote in the report.
There were 6.8% fewer homes priced over £1 million (US$1.34 million) in England and Wales—excluding London—in 2017 compared to 2016.
The number of £2 million-plus (US$2.7 million) prime country properties, including cottages, farmhouses, townhouses and manor houses, available for sale during 2017 fell 16.9% year-over-year.
In the meantime, demand has remained steady over the past 11 months. Between January and November, the number of new prospective buyers registering their interest in buying a home increased 1.2%, while the number of buyers viewing properties increased 4% over the same period in 2016, according to the report.
Although the risk of low inventory will likely extend into 2018, Knight Frank expects to see a 1.5% price growth in prime markets across England and Wales, based on current market dynamics.
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