Publication
Prime regional house prices – Q1 2025
Despite cuts in the bank base rate, the wider underlying economic outlook and changes in the tax environment meant the top end of the housing market remained price sensitive in the first quarter of 2025. While, as a whole, prices of prime properties outside of London were stable, they did not show any growth over that three month period. As a result, at the end of March 2025 values were -1.1% lower than a year ago.
While there was some variation at a local level, this picture was fairly universal across most parts of the market at the beginning of 2025.
However, there has been much more geographical variation in the price movements since the peak of the market in the Autumn of 2022 as shown in the chart below.
Activity levels in the prime regional housing markets paint a more positive picture. Data from TwentyCi tells us that agreed sales of £1m+ regional properties were 8% higher than in the same three months last year, albeit the improvement was less pronounced towards the end of the quarter.
With VAT being added to private school fees, those local markets that offer access to a good quality state education have proved to be among the strongest.
Kent’s grammar school system means the markets of Sevenoaks (3.0%) and Tunbridge Wells (5.1%) have benefitted and buck the trend with positive annual house price growth, with a similar effect in Lincoln (2.5%) and Cheshire (1.2%).
At the other end of the scale, with most local authorities choosing to double council tax on second homes and an increase in the stamp duty surcharge for such properties, prices of prime coastal homes have seen the most recent downward pressure on prices.
The recent correction in prices has offset the effect of the strong growth they saw in the wake of lockdown, when prime coastal properties benefitted strongly from the race for space and dash to the countryside.
While prices for such homes are -12.8% below where the were in the Autumn of 2022, this sits against the context of 25% growth during the preceding mini housing market boom. As such, it presents a buying opportunity for those still eager to take advantage of the lifestyle offering they provide.
Prior to the introduction of US trade tariffs, demand and supply in the prime housing market was fairly finely balanced. And so, layering on a degree of further economic uncertainty is likely to mean the continuation of a price-sensitive market through the Spring, with activity dominated by needs-based buyers and sellers.
The prospect of base rate cuts being brought forward points to a more competitive mortgage market that will benefit committed buyers. While that should support the market over the medium term, in the short term, we expect that to sit against the context of more sensitive buyer sentiment which will require sellers to remain pragmatic around pricing.
< View our latest Q1 2025 updates here.
For more information, please contact your nearest regional office or arrange a market appraisal with one of our local experts.
