Prime country house prices in England up over 5% year on year
Prime country house prices in England rose by 1.1% in the second quarter of 2014, taking the annual increase in prices to 5.2% over the year to June, the latest index shows.
In means that prime country house prices have now increased for six quarters in a row and are up 5.2% year on year, according to the index from Knight Frank.
The firm pointed out that although still playing catch-up with the prime market in London, where prices increased by 7.8% over the year to May, this is the strongest rate of annual growth in the prime country market in four years.
Sales are also increasing with the volume of prime country sales completed in the second quarter some 11% higher than the corresponding period last year. This was driven primarily by the sub £2 million market which accounted for 80% of Knight Frank sales over the three months to June.
The index reports says that the higher volume of sub £2 million sales has contributed to stronger price rises for homes valued below this threshold. While average values of sub-£2 million prime properties rose by 1.3% between April and June, growth in value for houses worth over £2 million was 0.6%.
In the super prime market, that is homes worth over £5 million, values actually fell by 2.3% over the course of the quarter, although they remain 1.2% higher on an annual basis.
While there are indications that buyers have started to factor the higher 7% stamp duty charge for £2 million plus properties into decisions, fresh uncertainty surrounding the possible introduction and form of a mansion tax has contributed to lower price growth for homes worth £2 million and more.
On a regional basis, the Home Counties and South West markets have continued to benefit most from the London ripple effect, with house price growth spreading outwards from central London.
Additionally, these markets are being boosted by the return of London buyers. This is reflected in country hotspots, many of which are close or within commuting distance of the Capital. Prices of prime property in Winchester and Cobham rose by 2.6% in the second quarter, while prices in Virginia Water were 2.5% higher and in Oxford values climbed by 1.8%.
Looking to the future, there are signs momentum may be slowing slightly. While the number of property viewings was fairly steady during the three months to June compared to the same period last year, the number of prospective buyers registering their interest in buying a prime country home fell by 2%, the report also says.
‘After little or no price growth for a couple of years, the increased activity in the country market is slowly filtering through to price growth,’ said Rupert Sweeting, head of Knight Frank Country.
He explained that there are areas that are more active than others with counties like Hampshire seeing a significant increase in sales reflecting renewed confidence from London buyers.
‘The ripples have not reached the far flung counties which are, as a general rule, more than two hours from London, unless the property is exceptional. As ever those houses that are near perfect are attracting strong interest and this year we have seen competitive bidding return in more sales than for a couple of years,’ he added.
‘One note caution is that pricing strategy is even more vital. Where vendors take agent’s down to earth guide pricing, they are being rewarded. If they are overambitious, the house will sit around for some time,’ he concluded.