market overview & outlook
TRANSCRIPT
2
To what extent has momentum been maintained in the market?
What happens once the stamp duty holiday comes to an end?
And the vaccination programme allows life to get closer to normal?
Will central London price finally recover as international travel resumes?
Source: Savills Research using TwentyCi 3
Market activity over £1m (versus average for month 2017-19)
0%
50%
100%
150%
200%
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21prov
Newly Agreed Sales New Instruction
5
Big
ge
st in
cre
ase
in a
ctivity
Hampshire
Kent
Oxfordshire
Surrey
Essex
Hertfordshire
Berkshire
Buckinghamshire
Dorset
East Sussex
Somerset
Devon
Worcestershire
Wiltshire
North Yorkshire
Leicestershire
Norfolk
Cornwall
Gloucestershire
Prime village & rural
+5.2%Annual growth
Prime towns & cities
+4.9%Annual growth
Source: Savills prime regional index, Q1 2021 6
Source: Savills prime regional index, Q1 2021 7
A prime regional property worth £1m in March 2007
£800,000
£900,000
£1,000,000
£1,100,000
£1,200,000
£1,300,000
Ma
r-07
Jun
-07
Sep-0
7D
ec-0
7M
ar-
08
Jun
-08
Sep-0
8D
ec-0
8M
ar-
09
Jun
-09
Sep-0
9D
ec-0
9M
ar-
10
Jun
-10
Sep-1
0D
ec-1
0M
ar-
11
Jun
-11
Sep-1
1D
ec-1
1M
ar-
12
Jun
-12
Sep-1
2D
ec-1
2M
ar-
13
Jun
-13
Sep-1
3D
ec-1
3M
ar-
14
Jun
-14
Sep-1
4D
ec-1
4M
ar-
15
Jun
-15
Sep-1
5D
ec-1
5M
ar-
16
Jun
-16
Sep-1
6D
ec-1
6M
ar-
17
Jun
-17
Sep-1
7D
ec-1
7M
ar-
18
Jun
-18
Sep-1
8D
ec-1
8M
ar-
19
Jun
-19
Sep-1
9D
ec-1
9M
ar-
20
Jun
-20
Sep-2
0D
ec-2
0M
ar-
21
City Town Village Rural
£1.29m
£1.20m
£1.06m
£964k
Source: Savills prime London and prime regional indices, Q1 2021 8
Prime house price movements in the year to March
-2.3%
-1.1%-0.7%
2.5%
5.1%
6.8%
8.8%
Outer primeLondon
flats
PrimecentralLondon
flats
PrimecentralLondonhouses
Outer primeLondonhouses
All primeregional
properties
Primecoastal
properties
£2m+ primecountryhouses
Source: Savills prime lettings indices, Q1 2021 9
Similar trends in the rental market
-6%
-4%
-2%
0%
2%
4%
6%
Ma
r-14
Ju
n-1
4
Sep
-14
De
c-1
4
Ma
r-15
Ju
n-1
5
Sep
-15
De
c-1
5
Ma
r-16
Ju
n-1
6
Sep
-16
De
c-1
6
Ma
r-17
Ju
n-1
7
Sep
-17
De
c-1
7
Ma
r-18
Ju
n-1
8
Sep
-18
De
c-1
8
Ma
r-19
Ju
n-1
9
Sep
-19
De
c-1
9
Ma
r-20
Ju
n-2
0
Sep
-20
De
c-2
0
Ma
r-21
Annual Rental Growth
Prime London Prime commuter belt
Source: Savills prime London and prime regional indices, Q1 2021 10
Relative pricing
1.0
1.5
2.0
2.5
3.0
3.5
Jun
-79
Sep-8
0
De
c-8
1
Ma
r-83
Jun
-84
Sep-8
5
De
c-8
6
Ma
r-88
Jun
-89
Sep-9
0
De
c-9
1
Ma
r-93
Jun
-94
Sep-9
5
De
c-9
6
Ma
r-98
Jun
-99
Sep-0
0
De
c-0
1
Ma
r-03
Jun
-04
Sep-0
5
De
c-0
6
Ma
r-08
Jun
-09
Sep-1
0
De
c-1
1
Ma
r-13
Jun
-14
Sep-1
5
De
c-1
6
Ma
r-18
Jun
-19
Sep-2
0
£ p
er
sq
ftra
tio
Prime London v Prime Regional PricesFrom Our Prime
Indices
Average Prime London property
£1,140per sq ft
Average Prime Regional Property
£411 per sq ft
Ratio
2.78
Source: Savills prime London and prime regional indices, Q1 2021 11
Prime house price movements since June 2014
-6.7%
-22.1%
-18.3%
-3.7%
10.5%
15.7%
0.1%
Outer primeLondon
flats
PrimecentralLondon
flats
PrimecentralLondonhouses
Outer primeLondonhouses
All primeregional
properties
Primecoastal
properties
£2m+ primecountryhouses
Source: Savills Research 12
Transactional activity in the £5m+ London market
0
5
10
15
20
25
30
35
40
45
50
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21
Num
ber
of sale
s
£5m - £10m £10m+ £5m+ average 2016-2019 (for the same month)
13
Market outlook
Stamp duty continues to
have the capacity to distort the
market Yet activity levels mean an
supply -demand
imbalance will persist into the Autumn market
Brexit risks have been
mitigated by a trade deal
despite uncertainty on
financial services
Even if we see a slight
rebalancing between town and country
marketsWith the prospect that some of the intensity will
ease after the end of June
A prolonged period of low interest rates underpins the capacity for price growth
over the medium term
The 3rd lockdown has
embedded some of the
changed lifestyle drivers
Tempered by the potential for
an increased tax
environment
Continued demand to upsize &
relocate over 2021
14
Price forecasts
Source: Savills Research Note: These forecasts apply to average values in the second hand market. New build values may not move at the same rate.
15
Rental forecasts
Source: Savills Research Note: These forecasts apply to average rents in the second hand market. New build rental values may not move at the same rate.