02 Jan UK prime country property price see highest quarterly rise for three years
Prime country house prices in the UK have increased by 3.1% this year and are forecast to increase by 3.5% in 2014, according to the latest analysis report from property firm Knight Frank. Location and price will have the greatest bearing on growth with homes worth under £2 million and in the South East outperforming the wider market, it says.
The data also shows that the average price of a prime country house in the UK increased by 1.4% in the final quarter of 2013, the biggest quarterly rise in more than three years.
Although price growth is varied across price bands and performance is becoming increasingly dependent on the value of a property. For example, while homes worth under £2 million increased by an average of 1.7% over the last three months, price growth for properties in the higher price brackets has been more muted.
The average value of a home worth between £2 million and £3 million rose by 1%, while the price of properties worth between £3 million and £4 million climbed by 0.4% between October and December.
However, the average price of a home worth between £4 million and £5 million fell by 0.3% over the same time period. But prices of super prime properties worth £5 million plus proved more resilient due to low stock levels increasing by 2% in the fourth quarter of the year.
The report points out that the higher stamp duty charge for £2 million plus properties, introduced at last year’s Budget, remains a key driver behind stronger growth from the lower price brackets, while talk earlier this year about the introduction of a mansion tax for £2 million plus homes has also weighed on buyers’ minds at this end of the market.
Overall demand in the market remains strong with the number of new applicants registering their interest in buying a prime country home over the three months to December 2013 up 16.1% compared to the same period of 2012. Property viewings were up 7.9% over the same period.
Knight Frank says this has led to a rise in the number of prime country house transactions, which were 25% higher in the three months to December compared to the same period last year.
The firm expects further price growth in the prime country market in the coming year, as improved economic conditions, and the improved confidence engendered by Government stimuli feed in. It is forecasting average growth of 3.5% across all the prime country house market in 2014.
However, as has been the case through 2013, location and price will have the greatest bearing on growth and there are likely to be significant variations in prime house prices across the UK.
Knight Frank expects properties in the sub £1 million price band to see the biggest uplift of around 5%. In the £1 million to £2 million price band growth of 4% is forecast for 2014, while for homes worth £2 million plus are likely to see more modest growth of 2%.
Property markets in South East England will also outperform as price growth is boosted by the ripple effect of London prices, and continuing price growth in the towns within easy commuting distance of the capital.
‘2013 has seen the market pick up month on month after a slow and late start. Most confidence has been in the price range up to £1.5 million and we expect this to continue,’ said Rupert Sweeting, head of Knight Frank Country.
He also predicts rises in the £2 million to £5 million sector as buyers come to terms with the stamp duty and possible property tax of some sort. ‘As ever prime property at £5 million plus where it has been near perfect and close to London has attracted international interest. We are confident 2014 will be better than 2013,’ he added.