April's national overview: A strong rally
The PrimeLocation.com Prime Index offers a unique, independent and robust view of the UK's prime property marketplace. The index reflects the evolving prime market, and for the first time provides authoritative data for all regions of the country.
National overview
- Prime asking prices increased for the first time this year following three consecutive monthly falls. The average Prime asking price increased by 0.9% – the steepest monthly increase since May 2011. Prices are expected to continue to rise in the short term as historically April, May and June see big increases in Prime asking prices.
Prices snapshot
- Prime asking prices now average £474,754 across the country, a 0.9% increase compared to February. Prices are currently 4.4% above those in March 2011.
- Prime prices increased in nine of the 11 regions with only the North East and Wales (both by -0.9%)seeing falls in asking prices. The most pronounced increases were in the capital and the South East where asking prices increased by 2.6% and 1.1% respectively.
- Prime Platinum properties also saw prices rise,albeit by a slightly more conservative 0.7%. On an annual basis Prime Platinum property prices mirror the wider Prime segment of the market having increased by 4.4%..
What's the context?
- For the last two years, March has marked a turning point in the Prime market ending a slump in asking prices over winter before activity, and prices, rally heading into the summer months. This March has seen a more pronounced increase than previous years.
- In spite of the introduction of the 7% stamp duty rate on properties worth more than £2million, Prime Platinum properties saw their biggest monthly increase since last June and remain substantially higher than a year ago suggesting its introduction has had a minimal immediate impact on the segment.
- Properties at the top end of the market have proved far more resilient than the rest of the market. Since the Prime Index started, there have only been four occasions when asking prices for Prime properties have been lower than the same month in the previous year, and only once for Prime Platinum properties. By contrast prices in the general market have been lower than the same month in the previous year on 19 occasions.
The Methodology
The Prime Index is created using a statistical methodology developed by Calnea Analytics, the company who produce the official Land Registry house price index. PrimeLocation.com has partnered with Calnea Analytics to ensure that the data is analysed to the highest possible standards by a company with an outstanding track record in the analysis of house price information. The result is a unique, independent and robust view of the UK's prime property marketplace.
The Prime Index tracks the supply and asking prices of prime property at UK, regional and London borough levels. PrimeLocation.com believes that there is a relative prime market in every region and that any definitions of prime must be flexible enough to react to overall market prices, i.e. the prime market is always relative to a specific region, the current local property market and asking prices. Given regional price differentials, selecting properties above a set value would bias the sample to London and the South East. Therefore, PrimeLocation.com has defined prime in a number of ways.
All regions excluding London
- Prime - the top 25% of properties in terms of value in a specific region
- Prime Platinum - the top 10% of properties in terms of value in a specific region
London
- To reflect the concentration of prime property within London, only the top 50% of boroughs (in terms of average property prices) are selected for the Prime and Prime Platinum segments
Not all the data from the PrimeLocation.com database is used in the monthly calculations. A number of exclusions are carried out to ensure that the final figures are not distorted. For example, properties tagged as sold, or with invalid postcodes, are not included. Even with these exclusions, the index is based on a substantial sample of prime properties - over 50,000 prime properties for sale across the UK.
The index is calculated using mix-adjusted averages. These are used instead of simple averages to avoid common distortions to the data. The mix-adjusted method removes the impact of monthly changes in the stock of property in the prime market and is adjusted by location, property type and bedroom numbers.