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The UK property market is set to see a pick-up in activity due to an election result that was positive for real estate markets but there is evidence of an ‘expectation gap’ emerging, new research suggests. Buyers and vendors have different expectations when it comes to pricing, according to the latest market update report from property firm Knight Frank. It shows that UK house prices rose by 1% in April, taking the annual increase to 5.1%, while prime central London prices rose by 0.3% in April, an annual uptick of 2.8%, and prime outer London rose by 0.4%, and are up 4.8% year on year. Overall prime country house prices rose in value by 2.5% in the year to March, while prime properties in Scotland climbed 1.2%. Meanwhile, the rental market in prime central London is showing continued growth, outpacing that seen in the sales market with growth of 4.1% while overall UK rents rose 2.1% in the year to March. Rates of growth are not uniform across different areas, for example there has been 6.2% growth in Kensington and just 0.1% in Mayfair. Rents in the Home Counties climbed by 4.7% in the year to the end of March. ‘Uncertainty had been the byword in most corners of the market in the run-up to what was considered the most closely fought election in decades. Now, with a majority government, there is clarity on the way forward on housing policies and a Conservative majority means that the approach is likely to be largely a continuation of what we have seen over the last five years,’ said Grainne Gilmore, head of UK residential research. She pointed out that housing supply will continue to be a priority as the current levels of new homes being delivered is far below the generally agreed target of 240,000 homes a year. Indeed, Knight Frank’s recent house building report revealed the measures house builders and developers think should now be a priority for policymakers to boost development and these include beefing up planning departments and releasing more public sector land. ‘The Conservatives have already pledged to extend the Help to Buy Equity Loan to 2020, something which has encouraged developers to take on larger schemes. Their plans to extend Right to Buy to more Housing Association tenants will provide the opportunity for home ownership among this group,’ explained Gilmore. ‘However in terms of housing supply, the policy of replacing each home purchased with another, new, home available for rent must be implemented, otherwise the scheme will result in a net loss of affordable homes,’ she added. Knight Frank expects sales to pick up. ‘In terms of activity and pricing in the market, it is likely that transactions will pick up now that the uncertainty in many parts of the market, especially the prime market which is no longer dealing with the prospect of a mansion tax,’ said Gilmore. ‘However, there is evidence that an expectation gap in pricing may be starting to… Continue reading →
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