16 Oct Price of prime country properties in UK rising at fastest since 2010
Prime country house prices in the UK have increased at their fastest rate in over three years, up 0.8% in the third quarter of 2013, new figures show. It is the strongest quarterly growth since the second quarter of 2010 and prices are also up on an annual basis with a rise of 0.4%, the latest index from Knight Frank reveals.
The Virginia Water, Berkhamsted and Cobham markets reported the strongest price growth in the third quarter of the year, up by 3.2%, 2.9% and 2.3% respectively.
The international property firm says that as the UK economy improves, confidence in the housing market is beginning to ripple out from central London, and into the immediate country house market.
But it also points out that there are significant regional variations, with the strongest price rises concentrated in locations within easy commuting distance of London. The South East saw the strongest growth in the third quarter with prices rising 1.5% on the back of increasing confidence in the regional economy.
In the South West and the Midlands regional markets prices increased by just 0.3% and 0.4% during the quarter, while in the North and Scotland prices were unchanged.
Despite the headline figures indicating improving conditions in the market, prime country house prices remain around 20% lower than at the peak of the market in autumn 2007. This is in sharp contrast to the prime central London market, where prices have risen by around 23% since their previous market peak.
More detailed data shows that recent price growth has been driven by homes worth up to £2 million. While average values of sub £2 million prime properties have increased on an annual basis by 1.3%, the value of houses worth between £2 million and £5 million have fallen by 1.1%. The price of super prime £5 million plus homes has fallen by 0.2% on an annual basis.
The higher 7% stamp duty charge for £2 million plus properties, introduced in the 2012 March Budget, remains a factor in the market and Knight Frank says it has certainly acted to constrain price growth for properties above this threshold.
However, demand for prime country homes remains strong. The number of new applicants registering their interest in this market was 12.4% higher in the third quarter of 2013 compared to the same period a year earlier. Viewings have also increased and were higher by 10.8% over the same time.
Splitting the results by property type confirms the pattern for higher growth for lower priced market segments; with quarterly price change for cottages, farmhouses and manor houses at 1.4%, 0.9% and 0.3% respectively in the third quarter.
‘Whereas before we saw significant price increases of properties up to £1 million, activity is now certainly returning to the prime property market as we move geographically out of London,’ said Rupert Sweeting, head of Knight Frank’s country department.
‘As ever, successful sales are only happening where the price guide is sensible with more vendors starting to heed this advice resulting in an increase in deals. For example, our Exeter office has had its record month for sales in August. Competitive bidding has also returned to the market with one of our properties in Berkshire going to sealed bids and selling 10% above the guide, exchanging contracts in 36 hours. It shows recovery is well on its way and confidence is returning to the market,’ he added.