Evidence that we are very close to the bottom of the prime country house market is showing with prices rebounding in some areas, according to the latest research from Knight Frank.
The average price for prime country properties in the Home Counties rose by 0.8% in the second quarter of 2009, according to the Knight Frank Prime Country House Index.
Andrew Shirley, Knight Frank’s head of rural property research says: ‘Although average prices across the UK did drop fractionally (0.9%) in the second quarter of the year, the market around London and in south-east England actually showed positive growth.
‘Ironically, it appears that London, which initially looked like it was going to be hit hardest by the credit crunch following the collapse of financial giants like Lehman Brothers, has recovered in confidence the quickest. Well-paid City workers now feel more secure in their jobs and sizeable bonuses already seem to be back on the agenda.’
The effect has rippled out to the Home Counties and the agency sold more houses in June than in any month over the past three years. And it is not just the areas closest to London that have benefitted; prices have also increased in the Cotswolds where many Londoners buy second homes. Average values around Knight Frank’s Cirencester office have risen by 3.4% in the past three months.
Smaller houses are seeing the fastest recovery in prices: the average price of a cottage has fallen by just 0.4%. Manor Houses, on the other hand, have fallen by 1.9%. The rarest and most expensive houses do seem to be bucking the trend with the price of £5m+ houses recording a 2.2% increase.
Rupert Sweeting, head of country department added: ‘Our Country Department sold 36% more properties last month than in June 2008 and viewings were also up 12%. Now the market needs more stock and credit to satisfy this demand.
‘We must, however, be realistic. Vendors holding off on a sale in expectation of a quick return to the market peak of 2007 will be disappointed. Likewise, anybody who thinks now is the time to increase the guide price of the house they are selling may struggle to attract interest. Purchasers remain price sensitive and the market is still finely balanced – it would be easy to trample the green shoots before they had really emerged.
‘A real shortage of supply has helped push up values slightly in some areas, but once availability builds again prices will probably remain flat for some time, possibly into the second half of next year.’
Prime country property performance by sector
Property Type Quarter 2 price change % Annual price change % Average value £
Cottage -0.4 -16.7 440,000
Farmhouse -0.3 -16.1 1.1m
Manor House -1.9 -19.8 2.5m
Unweighted average -0.9 -17.5 1.3m
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