Prime country properties are experiencing the fastest price growth for two years. According to the latest Knight Frank Prime Country House Index, country house prices have grown by 3.9% during the three months to the end of June 2006. Farmland has also been subject to price growth over the last few months, according to the Knight Frank Farmland Market review. Experts are attributing the growth to the strong London prime market and a limited supply of good country houses and well situated farmland.
The Country House survey shows that country cottage owners witnessed monthly price rises equivalent to £5,619, whilst farmhouse owners saw monthly gains of £13,244 and manor houses an astonishing £36,684 per month.
Knight Frank believes the booming prime London market (prices up 17.8% to June) has encouraged the demand for prime country houses. ‘On the back of an exceptional year in central London, London buyers are taking advantage of high price growth and are taking money out to the country,’ says Knight Frank’s Head of Residential Research, Liam Bailey, ‘There have been three themes in the country house market during the first six months of 2006; strong sales volumes, limited stock and stronger price growth.’
However rather than being led by the top end of the market, the country boom is driven by the farmhouse and smaller country house market, up 5.6%. Country cottages have also seen continued strengthening over the past months, the survey shows.
The survey’s results have encouraged Knight Frank that 2006 will be a good year for the country house market.
‘Very strong performance in the prime country house market in recent months underpins our forecast that this market, and in particular the most expensive properties, will outperform in 2006,’ said Mr Bailey, ‘ Our forecast is that prices of prime country properties will grow by 9% this year, with price growth of up to 12% for the very best properties.’
Farmland prices have also escalated over the recent months. According to Knight Frank high demand has pushed prices up by 4.3% over the last three months with 38% more acres being traded than this time last year.
‘The fortunes of the City continue to heavily influence the farmland market,’ says Clive Hopkins, Knight Frank’s Head of Farms. ‘The recent upset in the stock market undermined buyer confidence and punctured demand levels for a few weeks between April and June ? but this effect still did not impact significantly on bumper city bonuses paid out at the beginning of the year which are still continuing to drive forward demand at the top end of the market’.
According to Mr Hopkins the areas with the strongest price growth have been Hampshire, Oxfordshire, Wiltshire, Hertfordshire, the M3/M4 corridor, the M40 corridor, Herefordshire, and West Berkshire. The recent phenomena of northern European buyers looking to secure large tracts of commercial farmland in East Anglia, has continued and is now supporting prices in certain parts of Lincolnshire and Norfolk.