Increased demand amongst discerning cash rich buyers in the UK means that the best properties in the best locations are now typically within 5% to 10% of their peak, according to new research. Georgian style properties are more likely to attract a premium price as buyers make a distinction between different architectural styles, the data from Savills also shows. However the lack of stock has meant that the significant gap that opened up during the downturn between the best properties and those in less desirable locations has started to narrow.
Period properties are still extremely popular with buyers. Georgian style is the most favoured and attracts a 43% premium, double that in London. Victorian and Edwardian properties are also popular, attracting 20% uplift in value regionally and around 14% in London.
'In general terms, the best quality period family homes in the most popular £1 million to £2 million London price bracket are closest to regaining peak values, thanks to competition between cash rich, need-based buyers,' says Savills.
It says that a house worth £1.5 million at the peak of the market would now be worth just over £1.45 million, whereas a less desirable property of the same value at peak would fetch only around £175,000 less in today's market. In the prime London market, where price growth has been at its strongest, best in class properties are now less than 5.0% below their peak and back to peak in many cases. In contrast, prices of high end properties in less attractive locations, with a less popular architectural style or that have been on the market for too long, remain 16.0% off their 2007 peak.
Regionally price growth has been less pronounced, meaning that the best property is still on average 9.1% below its peak, but that compares favourably to an average off peak for all prime regional property of 15.9% and 24.8% for less desirable prime real estate. But in some areas such the Cambridge townhouse market, finite supply means that prices are also within 5% of the peak. The report concludes that a lack of supply in the market has allowed the gap between the best and the rest to narrow.
'Where people have perhaps been put off by issues such as proximity to a road, or school noise, a lack of choice has in some cases forced them to reconsider,' it says.
'As a result prices paid for blighted properties, which suffered the most during the downturn, have been boosted by 6.8% compared to 5.2% for the best in class.'
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