Strutts revises PCL forecast down to zero but ‘pleasantly surprised’ at regional activity levels

Strutt & Parker may have quietly revised its 2015 PCL price forecast down from 2% to a big fat zero, but it’s “pleasantly surprised” at the levels of activity going on the regions, especially given the looming fun and games in May.

The firm is predicting 9% growth for Greater London this year and thinks the UK is still on track for 5%, after witnessing “signs of strong recovery” outside the capital as buyers look for affordability.

Quoting stats from the Land Registry and Registers of Scotland, Strutts says 2014 saw a significant boost in transactions compared to 2013, especially outside Greater London and in Scotland (7.8% and 11.6% growth respectively).

In Scotland, 93,972 homes were sold in 2014, worth a total of £15.4 billion. Meanwhile, in Greater London, a total of 110,417 homes changed hands during the course of the year, down 2.2% on 2013.

Guy Robinson, Head of Regional Residential Agency: “Given the pending election, we are pleasantly surprised at the levels of activity, most specifically in those areas closest to London, in the sub £2m market.”

Stephanie McMahon, Head of Research: “There still lies an imbalance between London and the rest of the UK but there are signs of strong recovery in the regions as buyers outside the capital look for affordability. The holding off of interest rate rises, now not expected before autumn 2015 at the earliest, is a big positive. This combined with continued wage growth – UK real wages and living standards began to recover for the first time in five years in December – and low inflation, should give the national market the momentum it needs. We should see a flurry of activity up until the autumn as buyers take advantage of the low interest rate environment.”

James Mackenzie, Strutt & Parker’s Head of Country Department: “The beginning of 2015 has seen a significant increase in new applicants registered with us looking for prime properties ‘in excess of £2m’. We are witnessing at least double the amount of potential purchasers enquiring about properties we are currently offering or are now bringing to the market. However, our viewing levels are not higher, which would indicate that there are a significant number of people who are beginning to look at moving but are waiting to see what the market has in store for this year.”

The agency has also been profiling its £2m+ country house buyers from last year and found that the vast majority (79%) were buying for their primary residence, with 13% buying as a second home and 8% as a pure investment. The team reckons this could be linked to the increasingly high cost of buying and moving, meaning that people are opting to go for one big house rather than two smaller ones or a buy-to-let portfolio.