There is a build-up of buyer demand in the prime property market which could trigger increased sales when there is more certainty over Brexit, according to a report.
The prime housing market, which includes homes in the top 5% price bracket, held up “better than expected” in the first quarter of 2019, given heightened political uncertainty and fragile consumer sentiment, according to real estate adviser Savills.
There is a growing pool of demand developing among buyers who are taking “a wait and see approach”, it said.
Prime property values in London are 2.5% down annually, but on a quarterly basis they slipped by just 0.3% in the three months to the end of March.
Savills said this was the smallest quarterly fall in London since the Brexit vote.
Brexit uncertainty means many would-be buyers and sellers continue to sit on their hands, Savills said.
In the first three months of the year, new buyer registrations for properties over £1 million were up 36% in central London and 11% across the rest of the capital, but this has not yet translated into increased market activity, it said.
Lucian Cook, head of UK residential research at Savills, said some buyers, particularly those in the most expensive central postcodes, “are sensing a market that could be at or close to its bottom”.
He continued: “There is a sizeable, growing pool of demand developing amongst buyers adopting a wait and see approach until the outcome of Brexit negotiations becomes clearer.
“Whichever way the Brexit pendulum swings and whatever the fundamentals of demand that underpin the prime housing markets, it could be some time before we have a clear understanding of what lies ahead – both politically and economically.
“This demand could translate into an uptick in transactions once there’s clarity, but that is unlikely to be matched by price growth in the short term.”
Savills said that among prime markets across Britain, Scotland is doing particularly well, with Edinburgh being the “star performer” with prices up by 7.4% annually, helping push prime house prices in Scotland up by 2.3% annually overall.
By contrast, prime property values in cities in southern England which have previously performed strongly have softened over the past year.
Oxford, Cambridge, Bristol and Bath have all seen prime property prices fall annually, Savills said.
Mr Cook said: “Brexit remains the biggest single constraint on the market, contributing to a lack of urgency among buyers who will only commit when they perceive real value.”