_Prime residential market shows signs for optimism

Interviewed for The Wealth Report published earlier this year, leading global risk analyst Ian Bremmer said: "I like to think I’m a pretty optimistic guy, but 2017 is the most significant year for political risk since World War Two."

No doubt political commentators have expressed similar sentiments in each of the post-war years – do a Trump presidency, North Korea's latest antics and Brexit add up to more global risk than that experienced during the 1962 Cuban missile crisis, or any number of other crises over the past 60 years?

Whatever the answer, the question itself is rather moot. By any measure one might like to use, current political, security and economic risks are undoubtedly heightened and are having a significant bearing on all markets – not least prime property.

The prime residential markets in the UK, especially above £1m, have certainly had to cope with considerable regulatory change and even instability. The tally of property tax reforms, which began under George Osborn in 2010, totals just under 30, covering most noticeably Stamp Duty, but also income, inheritance, capital and non-dom taxes.

The market has reacted to the recent deluge of fiscal reform, last summer's "leave vote" and this summer's general election result. After doubling in value after the 2009 crash , prime London prices have fallen 10% in central locations since late 2015. This repricing seems to have had the effect of prompting new activity.

Looking at data for the summer of 2017, just ahead of this publication going to press, the numbers of new prospective buyers registering in the market was ahead of last year by around 10% and in line with the respectable figures seen in 2014 and 2015.

On the supply side, the volume of new properties coming to the market was higher by around 5% than the levels seen in recent years.

Sales too have improved. Following a dismal nine months after the Brexit referendum that is in itself not an especially positive statement, but to the surprise of many in the industry, the summer months saw the number of prime London sales volumes hit levels not seen since 2013.

Despite the uptick in sales volumes, stock levels are high. This means that, much to their delight, buyers have more choice.

Despite the deluge of uncertainty the one statement that can be made about the London market with some confidence is that irrespective of political and economic events - the desire to own a property in the City’s golden postcodes, remains undimmed – just not at any price.

Our annual Wealth Report compares the value of prime global real estate markets by ranking leading cities according to how many square metres $1 million buys. Monaco topped the chart in 2017, followed by Hong Kong, New York and then London.

Taking this concept a step further, we have selected 20 prime markets across the UK and calculated the average per square foot value for a luxury property in each, although we acknowledge that this can vary significantly.

While not quite in the same league as Monaco or London in terms of price, the results do highlight the relative value offered by prime UK markets outside of the capital.