Mar 29, 2011

UK prime country house market sees prices rise in first quarter of 2011

Prices of UK prime country houses rose in the first quarter of 2011 by 0.5%, partially reversing some of the prices falls in the second half of 2010, the figures published today (Tuesday March 29) show.

With prices of prime London property having risen by 30% since March 2009, buyers coming out of the capital are beginning to have an effect on the prices of the best country properties, according to the Knight Frank Prime Country House Index covering the first three months of 2011.
It also shows that price growth in the country is still not evenly spread, with slight falls recorded in the North and Scotland, and the strongest growth, 1% and 1.2% respectively, recorded in the South East and the South West of England.
With low stock volumes and ongoing strong interest from London based buyers, further price growth in the counties around London should be expected over the spring and summer.
‘The UK housing market has been experiencing difficult conditions since the middle of last year, and the prime country house market did not escape this trend. Prices fell in the second half of 2010 across most regions,’ said Liam Bailey, head of residential research at Knight Frank.
‘However, the revival in the London market since the autumn has begun to filter through to the country house market. With foreign buyers happily buying over 50% of central London £2 million plus properties, some of these vendors are now looking to move into the country house market,’ he explained.
‘For London buyers, moving to the country at the current time makes a lot of sense. Prices in London are 30% higher then they were in March 2009; in the country prices are up only 7% over the same period. In short, this means that someone selling in London and moving to the country has more than 20% additional spending power now compared to two years ago,’ he added.
He believes that while we ought not to expect rapid price growth from this point, it would seem fair to assume that the best country house properties will see further rises over the next few months.
According to Rupert Sweeting, head of the country department at Knight Frank, there is an imbalance of supply and demand in the prime country property market and a shortage of supply is becoming quite acute in some areas such as the Cotswolds and Oxfordshire.
‘We are confident that prime houses that are sensibly priced will attract considerable interest. Price rises for the best of the best are likely to occur and those vendors who go to the market now will be well rewarded,’ he said.
  ‘The ripple effect from London is spreading, albeit very slowly. Prices within a two hour radius of London are creeping up, however, more than two hours away from the capital it is not so straightforward. Buyers from London will get more bang for their buck the further they go from London,’ he added.


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