May's national overview: Second month of rising prices
The PrimeLocation.com Prime Index offers a unique, independent and robust view of the UK's prime property marketplace. The index reflects the evolving prime market, and for the first time provides authoritative data for all regions of the country.
National overview
- Rebounding from a three-month winter lull in the property market, prime asking prices rose sharply for the second consecutive month in April to a record high. Over the past two months, asking prices have increased by 1.7% and so the average price for a UK prime property is now £478,797. This is £3,200 above the previous high, seen in November 2011.
Prices snapshot
- UK prime asking prices now average £478,797, some 4.8% above those seen in April 2011. Prime platinum properties have performed similarly, with annual increases of 4.5%, taking the average to £660,902.
- Asking prices at the top end of the market increased in 10 of the 11 UK mainland regions, with London and the East of England experiencing the biggest gains. Average prices in London rose by 2.1%, while in the East of England they increased 1.6%. The North East was the only region to experience a price fall – down 1% compared with the previous month.
- Prime platinum properties also performed strongly with prices rising in eight regions. London, the South East and the East of England experienced the largest price rises, with gains of 2%, 1.1% and 1.7% respectively.
What's the context?
- April is traditionally a strong month for the property market, with prices rising after the quiet winter months. The prime index has recorded price increases during four of the five Aprils on record. Even when allowing for this, the current market appears to be strong with the highest April increase of the past three years.
- The East of England, traditionally popular with commuters to the capital, is experiencing rapid growth following a prolonged period of suppressed prices. Gains of 2.5% in the last two months show that prices have almost completely recovered from a seven-month period in which they fell on average by £11,500.
- In addition to large increases in the prime market, prices for all UK properties also rose during April, though the gap between prime and non-prime properties continues to increase. Nationally, the average property price is currently £220,957, 0.6% higher than in March.
The Methodology
The Prime Index is created using a statistical methodology developed by Calnea Analytics, the company who produce the official Land Registry house price index. PrimeLocation.com has partnered with Calnea Analytics to ensure that the data is analysed to the highest possible standards by a company with an outstanding track record in the analysis of house price information. The result is a unique, independent and robust view of the UK's prime property marketplace.
The Prime Index tracks the supply and asking prices of prime property at UK, regional and London borough levels. PrimeLocation.com believes that there is a relative prime market in every region and that any definitions of prime must be flexible enough to react to overall market prices, i.e. the prime market is always relative to a specific region, the current local property market and asking prices. Given regional price differentials, selecting properties above a set value would bias the sample to London and the South East. Therefore, PrimeLocation.com has defined prime in a number of ways.
All regions excluding London
- Prime - the top 25% of properties in terms of value in a specific region
- Prime Platinum - the top 10% of properties in terms of value in a specific region
London
- To reflect the concentration of prime property within London, only the top 50% of boroughs (in terms of average property prices) are selected for the Prime and Prime Platinum segments
Not all the data from the PrimeLocation.com database is used in the monthly calculations. A number of exclusions are carried out to ensure that the final figures are not distorted. For example, properties tagged as sold, or with invalid postcodes, are not included. Even with these exclusions, the index is based on a substantial sample of prime properties - over 50,000 prime properties for sale across the UK.
The index is calculated using mix-adjusted averages. These are used instead of simple averages to avoid common distortions to the data. The mix-adjusted method removes the impact of monthly changes in the stock of property in the prime market and is adjusted by location, property type and bedroom numbers.