The further from London the better when it comes to the U.K.’s luxury housing market, where political uncertainty and stamp duty continue to dog the British capital more than anywhere else.
"The markets furthest from the capital have been the strongest performers, while those most closely linked to London have seen price falls," according to the Savills quarterly prime residential index, which the brokerage released on Wednesday.
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Cities like Edinburgh and Glasgow in Scotland were the U.K.’s strongest performers in the luxury sphere, while the suburbs of London and the outer commuter rings around the city saw continued price declines. The diverging market performance from region to region kept overall prices in the U.K. virtually flat, declining only 0.8% year over year in the second quarter, according to the Savills index.
Buyers in the market for homes from £1 million to £2 million (US$1.3 million to US$2.64 million) are driving price growth in the Midlands, North England and Scotland. Average luxury prices in the Midlands and Northern England have jumped 2.6% over the past year—robust growth compared London, where prices fell 4% over the year.
Luxury prices rose 1.8% in Scotland, where the cities dominated. Edinburgh logged a striking 7.5% bump in prices over the past year, some of the strongest price growth in Europe, while prices rose 2.5% in Glasgow.
Other cities in the U.K. fared far worse. Cambridge saw prime homes fall 4% in the year through June, according to Savills.
"The traditional North-South divide has been turned on its head," Savills said in its report, referring to the traditional economic gap favoring London and the more affluent south over the north.
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Luxury homes in the suburbs of London fell 3.2% year over year in the second quarter with the outer commuter rings around the capital seeing values fall approximately 1%.
"Properties will sell when they are priced for current market conditions," said Frances Clacy, research analyst at Savills, in a statement. "Sellers need to remain pragmatic and flexible on pricing, and we’ve seen a slight uptick in the number of sellers accepting price adjustments in order to achieve a sale."