According to a new study, despite dismal market conditions elsewhere, the prime country market has been holding up.

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Although it appears to be bad news with country prices down 0.92% for the month of August, it is the first fall of the year, a nominal drop and values are up on those reported a year ago.

However, compared with July 2008, prices for country homes were 5.6% higher, indicating there has been a dip.

The prime country area is faring better than the capital though, with London values dropping by another 2% in August, the third consecutive monthly fall with prices 5.37% lower than in May.

The data from primelocation also shows that all prime London areas have experienced a monthly average price reduction and annualised growth has decreased to 4.1%, at its lowest level since May 2006.

On the plus side, some regions are showing positive growth, including Westminster, up 7.2%, and Finsbury up by 5.3%.

Of areas showing negative growth, City and Docklands has fared the best for the second month running, decreasing by a marginal 0.96%, compared to a drop of over 2.2% in Balham, the worst performing area.

While most areas in Britain saw price falls, the North celebrated its fifth consistent rise at 1%, while the West Midlands and Wales reported growth of 0.44%. The South West was the worst performer with prime price falls of 2.1%.

The downward trend continues in the prime London lettings market as well, with rents dropping for the fifth consecutive month, this time by 0.92%. This is believed to be a direct result of stock levels currently at an all time high – up 85% on this time last year – with ‘reluctant landlords’ having to put houses that won’t sell onto the rentals market.

* Prime country houses for sale