Country houses are leading the property market, according to Knight Frank?s latest figures. Its Prime Country House Index reports growth of 2.5% in average country house prices during 2005, with owners of country cottages, farmhouses and manor houses respectively seeing price rises of £1,036, £2,912 and £7,126 each month between June and December last year.

Knight Frank?s Head of Residential Research, Liam Bailey, said ?The final three months of last year saw a break from the traditional Christmas slowdown, with a higher than expected number of viewings undertaken (68.4% above the same month in 2004).?

The recent spurt in growth means country house owners have recouped the losses experienced in 2004 and early 2005. Knight Frank attributes the recovery in country house prices to demand emanating from London and the big regional capitals together with significantly higher market confidence.

Manor house prices rose by 3.5%, an average increase of £42,755 in the year to December 2005, according to the estate agent. One such property currently on the market is The Manor House at Lower Oddington, on the market at £2.5 million. The Manor House is a Grade II listed six bedroom property set in the heart of the Cotswolds with 3 acres of land and a bungalow with planning for an indoor pool and guest house.

Farmhouse prices also increased; the average rise was from £1,094,235 to £1,111,706 in the final six months of the year. Burrow Farm, a Grade ll Listed thatched Exmoor farmhouse near Wootton Courtenay in Somerset, is currently on the market for £1.1million. The main property has five bedrooms, a separate 3 bedroom cottage, a range of traditional buildings including stabling and a 2 bedroom annexe.

Despite the country house market?s promising outlook, property economists are reluctant to forecast persistant improvement. Fionnuala Earley, Group Economist for the Nationwide acknowledges that the national housing market has stepped up a gear of late, but predicts that subdued market activity and strained affordability could make it difficult for the renewed strength to be maintained. ?The key question for the market is whether the strong pickup over the last 4 months will persist,? she commented, adding that while the UK economy seems to be recovering, 2006 is still likely to produce below-trend growth.

Meanwhile Savills is adamant that the top end market will lead the way in 2006, supporting Knight Frank?s latest bulletin. ?In 2006 we expect both the prime central London and the prime country house market to outperform the mainstream national market,? said Harriet Black, Associate for Savills Research.

Hot target locations for city purchasers

London

Just about everywhere ? but especially west of the capital from Berkshire to Wiltshire

Bristol

Increasingly south of Bristol into Devon and Cornwall

Leeds

North Yorkshire, especially around Harrogate and Ilkley, but increasingly further north toward Darlington

Birmingham

The marches are the main target ? still considerable value to be found either side of the Welsh border

Manchester

Cheshire is always hot, but high prices are pushing affluent Mancunians into north Wales and Cumbria

Edinburgh

The Edinburgh commuter zone expands all the time and now touches into Northumberland