The UK’s prime property market is evolving, rather than suffering through the coronavirus pandemic, according to fresh data from Coutts, the wealth manager and private bank.

The bank’s client-data demonstrated an increase  in buying activity in main homes, second homes and investment properties in 2020 when compared to previous years.

Outside of London, which remains the UK’s largest prime market, the south east was the most popular area for new mortgages for main homes, particularly Kingston upon Thames, Guildford and Oxford (KT, GU and OX postcodes).

But when looking at prime property as an investment opportunity, Coutts believes that government policy will have a significant impact.

The government plans to introduce a 2% stamp duty surcharge for foreign buyers of UK residential property from 1 April. This will provide added impetus for overseas investors to transact in Q1, according to Coutts.

The stamp duty holiday on properties below £500,000 is also due to end 31 March 2021 and as such, Coutts expects strong demand in Q1 as investors rush to beat the deadline.

Across prime London for instance, there are 16.2% more properties under offer now compared to a year ago, and Coutts believes a lot of this demand is being driven by buyers looking to transact before the stamp duty holiday ends.

“The market will need time to adjust to these changes and we could see a softening in demand in the second quarter as a result,” said Alan Higgins, Coutts’ chief investment officer.

However, the bank believes the momentum seen towards the end of 2020 will continue throughout the year ahead, largely down to social changes and a favourable macroeconomic environment.

Higgins added: “Firstly, the uncertainty with respect to Brexit is largely in the past. Secondly, we expect a V-shaped economic recovery as the vaccine distribution progresses. And thirdly, we should the release of pent-up demand from buyers and sellers who put plans aside during lockdown.”