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THE WATERFRONT PREMIUMPrime waterfront properties in the UK are worth up to 70% more than their inland counterparts on average, according to Knight Frank’s Prime Waterfront Index.
The index measures the potential value uplift for prime homes with a view of water compared with similar properties located further inland.
A closer look at the data reveals that the premium varies by location, with the South West – home to the longest coastline of any English region – offering the most added value at up to 91%. The region boasts some of the country’s most expensive waterfront properties, with Sandbanks, Rock and Salcombe some of the prime hotspots.
In the South East the very best waterside homes can command premiums up to 44%, falling to 41% in East Anglia and 33% in Scotland.
Amenities are also a crucial factor for many buyers and having direct access to water is something many people are prepared to pay a premium for.
Private slipways are considered the most valuable feature, pushing up the waterfront premium up by as much as
118%. Properties with a private mooring or pontoon can see the waterfront premium rise to 106% and 105% respectively, while jetties and private beach access can add up to 91% and 86%.
In terms of location types, homes situated on estuaries command the largest uplift of up to 96% compared to a similar property inland. Prime harbour side properties enjoy an uplift of up to 91% due to their rarity and prime coastal properties are worth up to 67% more.
Heading away from the sea, lakeside homes are 40% pricier than their waterless equivalent, and being situated next to a river can add up to 67% to the value of a prime residential property.
Our data suggests that interest in UK waterfront properties extends beyond these shores with individuals from all over the world searching for a waterfront home in the UK last year. Excluding the UK, where the majority of web searches originated, this was led by potential buyers in Europe and Asia Pacific (figure 1).
Key headlinesPrime waterfront properties can command a 70% premium on average across the UK
The South West offers the potential for the most added value, followed by the South East and East Anglia
Private slipways have the potential to push the premium up to as much as 118%
Source: Knight Frank Residential Research
ESTU
ARY
95%
95%
40%
40%40%
40%40%
95%
95%95%
95%95%
HAR
BO
UR
RIV
ERSI
DE
CO
ASTA
L
LAKE
SID
E
ESTU
ARY
95%
40%
67%67%
91%95%
HAR
BO
UR
RIV
ERSI
DE
CO
ASTA
L
LAKE
SID
E
FIGURE 2
Property location and potential uplift in value Q2 2015
RESIDENTIAL RESEARCH
WATERFRONT INDEX
OLIVER KNIGHT Residential Research
“ Having direct access to a river or a lake is something many people are prepared to pay a premium for.”
Follow Oliver at @oliverknightkf
For the latest news, views and analysis on the world of prime property, visit Global Briefing or @kfglobalbrief Source: Knight Frank Residential Research
FIGURE 1
International demand Web searches on www.knightfrank.co.uk for prime UK waterfront property (excluding UK searches)
EUROPENORTH AMERICASOUTH AMERICAASIA PACIFIC
AFRICAMIDDLE EASTRUSSIA & CIS
EUROPENORTH AMERICASOUTH AMERICAASIA PACIFIC
AFRICAMIDDLE EASTRUSSIA & CIS
EUROPENORTH AMERICASOUTH AMERICAASIA PACIFIC
AFRICAMIDDLE EASTRUSSIA & CIS
8%
54%
6%
3%
8%
17%
4%
4%4%
54%
54%
Disclaimer
© Knight Frank LLP 2015 – This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names.
For the latest news, views and analysison the world of prime property, visit
KnightFrankblog.com/global-briefing
GLOBAL BRIEFING
RECENT MARKET-LEADING RESEARCH PUBLICATIONS
Knight Frank Research Reports are available at KnightFrank.com/Research
RESIDENTIAL RESEARCH
Oliver KnightResidential Research +44 20 7861 5134 [email protected]
UK WATERFRONT SALES
Christopher Bailey Head of National Waterfront +44 13 9284 8822 [email protected]
WATERFRONT INDEX Q2 2015
Prime Country Review Summer 2015
£1M+ MARKET NATIONAL PARK PREMIUMPOST-ELECTION MARKET UPDATE
PRIMECOUNTRYREVIEW UK PRIME COUNTRY HOUSE MARKET SUMMER 2015
RESIDENTIAL RESEARCH
The Wealth Report 2015
POST-ELECTION ANALYSIS PRICE PERFORMANCE MAP OF LONDON
THE RESURGENT RENTAL MARKET
LONDON RESIDENTIAL REVIEWTHE GENERAL ELECTION AND THE PRIME LONDON MARKET SPRING 2015
RESIDENTIAL RESEARCH
London Residential Review - Spring 2015
FIGURE 3
Prime waterfront premium by region
33%SCOTLAND
44%
41%
91%SOUTHWEST
SOUTHEAST
27%WALES
EASTANGLIA
70%Average UK
premium
Source: Knight Frank Residential Research
Prime Country House Index Q2 2015
Average values rose by 0.9% between April and June, an indication that any expectations of a post-election price jump in the prime market were unfounded.
Annual price growth slowed to 2.3%, its lowest level in two years (figure 1).
One of the key reasons price growth remains subdued, despite the election of a majority government and the removal of the threat of a ‘mansion tax’, is the fact that the prime market is still absorbing the recent changes to stamp duty.
The change, which came into effect in December, has resulted in higher purchase costs for properties worth more than £1.1 million. There is anecdotal evidence to suggest that some buyers are factoring the increased cost into offers, resulting in some price adjustments.
Additionally, while there was a release of pent-up demand in the weeks
immediately following the vote as buyers who had adopted a wait and see approach prior to the election returned to the market, rising stock levels – which peaked to their highest level all year in May – helped to mitigate any significant jump in property values.
The greater political certainty afforded by the election result means there is a more positive outlook for the residential property market as a whole. Interest rates remain at record low levels, economic growth is steady and mortgage rates are competitive.
During the quarter, prime city markets continued to outperform more rural locations, with notable price growth in Bath, Bristol and Winchester among others.
Prime urban property markets are now, on average, 2% above their 2007 peak, while neighbouring village and rural locations remain 13.2% below peak levels (figure 2).
PRIME COUNTRY HOUSE PRICE GROWTH SLOWSDespite the certainty provided by a majority government, activity and prices in the prime country house market remained subdued during the second quarter. Oliver Knight examines the latest figures.
Key headlines from Q2 2015Average values rose by 0.9% between April and June
Annual price growth slowed to 2.3%
Higher stamp duty rates for prime properties has moderated activity
Prime urban property values are on average 2% above their 2007 peak
FIGURE 1
Price growth slows Annual change in prime country property values
FIGURE 2
Town and city markets outperform Price growth in urban and rural locations (100 = March 2005)
Source: Knight Frank Residential Research Source: Knight Frank Residential Research
201520142013Q2Q1Q4Q3Q2Q1Q4
0
1
2
3
4
5
6
Q2Q1Q4Q3Q2Q1Q4
3.1%
4.5%
5.2%4.7%
3.4%
2.5% 2.3%
RURALURBAN
60
70
80
90
100
110
120
130
Jun-
15
Jun-
14
Jun-
13
Jun-
12
Jun-
11
Jun-
10
Jun-
09
Jun-
08
Jun-
07
Jun-
06
Jun-
05
RESIDENTIAL RESEARCH
PRIME COUNTRY HOUSE INDEX
OLIVER KNIGHT Residential Research
“ The prime country house market is still absorbing recent changes to stamp duty.”
Follow Oliver at @oliverknightkf
For the latest news, views and analysis on the world of prime property, visit Global Briefing or @kfglobalbrief
