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.

UK residential property rents edged higher in the first three months of the year

Nearly a third of British landlords increased their rental income across their portfolios in the first quarter of 2011, research from buy to let mortgage specialist Paragon has revealed.

It found that 32% of landlords have raised rents across their portfolios during the period and one in 10 landlords said that rental income across their portfolio rose by up to 2%.

A further 10% said that their income rose by between 2% and 4%. However, nearly 5% of respondents said that rental income had risen by more than 8%.

‘Supply and demand dictates rental pricing and landlords are experiencing significant tenant demand for their properties at present. Obviously landlords do not want to make rented accommodation unaffordable, but a considerable proportion of them have been able to make small increases to their overall rental income during the first quarter,’ said Nigel Terrington, Paragon Group chief executive.

‘Government figures show that nearly 300,000 extra households moved into privately rented accommodation in England alone last year and that is placing increasing strain on stock in the sector. It is encouraging that buy to let lending increased by 22% during 2010, but more needs to be done to ensure that the private rented sector can expand to sufficiently meet tenant demand,’ he added.

Meanwhile, Landlord Action, an organisation specialising in tenant eviction, has been approached my Mike Weatherley MP, to support an Early Day Motion which calls for squatting to be criminalised. The Early Day Motion has already been backed by 19 additional MPs from both sides of the House.

Landlord Action is calling on home owners to support the campaign in two ways.  Firstly, by signing a petition which will be presented on 04th April at Downing Street, and secondly, by writing to their local MP encouraging them to back the campaign.

Essentially, squatters consume services that they have not paid for. Many would feel that it is wrong. We have been advocates of homeowner rights for over ten years, and we have seen the situation getting worse. It is reassuring to see that MPs such as Mike Weatherley are taking action to help the situation,’ said spokesman Yogesh Chandarana.

A spate of high profile, well publicised cases have brought squatting to the forefront of the National press recently, highlighting the growing injustice being done to homeowners by squatters, many of whom travel thousands of miles to engage in squatting knowing they will be protected by the law.

In one example, squatters in Brighton made a freedom of information request to see which council homes were empty. An obvious strategy to target homes, it clearly demonstrates the level of organisation that squatters are now achieving, added Chandarana.

‘The problem is that squatting is not a criminal act so they get evicted from one home and simply move on to another, to then be evicted and evicted and evicted. Brighton and Hove has been plagued by a number of repeat squatting cases and in at least the last seven years, police have made no squatting prosecutions due to the difficulties in obtaining evidence where technical criminal infringements have been made,’ said Weatherley.

‘We need to criminalise this act so these people can be held to account for their actions and we hope that the recent media attention around this topic will drum up enough support for the EDM to be submitted for debate in the House of Commons,’ he added.