An appetite for ?trophy? mansions has returned to the market for the first time since 9/11, according to Savills. The prime property market has remained buoyant over the last quarter, according to the agent?s latest figures, prompting agents to forecast annual growth of 8% in 2006. Meanwhile supply shortages continue to put upward pressure on house prices in the longer term, especially for larger, quality properties. ?Now could be a very good time for profit-taking,? said Yolande Barnes head of Savills Research.
The latest index shows that house prices in areas such as Notting Hill, Kensington and Holland Park have risen by 22.5% in the last six months. But according to Ms Barnes too much has been read into the prime central London market since the end of last year. ?The rise follows four years of very low growth, during which time prime markets significantly under-performed mainstream markets,? says Ms Barnes. Affordability restraints and a seasonal lull will cause the current rate of growth to slow in the second quarter of 2006, says Ms Barnes, resulting in an end-of-year increase of 14%.
High prices are also spreading from the capital to other prime markets. City bonuses and demand from international buyers are driving up prices in the countryside which, according to Savills, is consistent with what was happening in the prime central London market late last year. And the drive is coming from the top rather than the middle of the prime market: ?Until the beginning of this year country cottages outperformed other property types, but over the last six months, stronger growth has been seen in the value of the largest country houses, the mansions,? said Ms Barnes.
Prime country property prices have risen 5.2% over the last six months. The Home Counties outperformed both the mainstream and prime markets of Scotland, North West, North East, Yorkshire and Humberside for the first time in five years, enjoying growth of over 8%.
New figures from Scottish property consultants CKD Galbraith also demonstrate a ?healthy and durable? property market north of the border but unlike southern areas, growth is driven by intense activity in the middle section of the market. ?Most clients, provided their property is priced realistically, have seen it generate a lot of interest and selling very quickly,? said Hamish Spencer-Nairn of CKD Galbraith. ?These figures bode well for the rest of the year and I expect the Edinburgh market to retain its pole position against residential prices across Scotland.?