The New Prime Property Boom
The UK Prime residential market has often been regarded by industry experts as a fairly stable asset class. However, data reported from Rightmove, Knight Frank and PrimeResi is showing signs of a potential boom. This report said that £1m+ sales are running 100% above last year’s level, and that prime is very much leading the property market rebound.
CapitalRise’s indicators are also signalling growth for 2020. During this generally tough period, growth has continued from 2019, for example we’ve funded seven multi-million-pound developments across high-demand prime areas such as Chelsea and Notting Hill, and in the second quarter of 2020 we saw an 80% increase in funding requests from borrowers compared to the same period the year before.
According to the new analysis of Rightmove data by Knight Frank, in the week ending 16 August, a 61% increase in properties were marked Sold Subject to Contract (SSTC) on Britain’s biggest property portal, Rightmove, compared to the same week the previous year.
The report also stated that Prime markets seem to be leading the ongoing activity surge, with a larger increase in £750k+ and £1m+ deals than in lower price brackets. A similar trend was seen following the Global Financial Crisis in 2008.
“Evidence suggests the rebound is continuing”, says Knight Frank, despite many influential pundits warning that things are likely to slow down eminently.
With research demonstrating findings such as these, we continue to work with prime residential developers in helping to fund their projects. The increase in demand of funding continues to demonstrate great optimism, and a recent influx of investors has also been a strong indication for the appetite for this distinctive asset class.
“Such a strong rebound reflects the ongoing release of pent-up demand following lockdown, coupled with the recent cut to stamp duty,” says Oliver Knight, Head of Residential Development Research at Knight Frank. “It is also likely that there are wider behavioural shifts in play, as people reassess their housing needs – the ‘escape to the country’ narrative £1m+ sales are running 100% above last year’s level as prime leads the property market rebound.