They increased by 0.4% in the second quarter of 2013 but still have some way to go to make up an annual decline of 1.2% and 21% below the market peak in the third quarter of 2007.
There is some price differences with prices of properties under £2 million and those in the £5 million plus bracket seeing prices increase while values continued to fall for houses worth £2 million to £5 million.
Despite the recent increases in house prices, the prevailing feeling in the market is still one of uncertainty, with transactions taking longer as buyers consider their options, says Knight Frank.
The firm reports that while viewings increased by 7.9% over the first six months of 2013 compared to the previous year, the number of new applicants rose by just 0.1% over this time. The late spring also meant activity between the traditionally busy months of April and June was more subdued than usual.
‘Prices in the country house market remain stable, however, realistic pricing continues to be all important. Spring’s late start has been clearly reflected in the country house market, which has been delayed by between four to six weeks across the country,’ said Rupert Sweeting, Head of Knight Frank’s Country department.
‘In the last month we have been experiencing encouraging trading conditions and see now as an opportune time to take advantage of the gulf between the capital and the country,’ he added.
The report also says that the increase in stamp duty announced by the UK Chancellor in the March 2012 Budget for homes valued at over £2 million continues to have a noticeable impact on the market. While average prices for sub £2 million homes increased by 0.8% in the second quarter of the year, homes in the £2 million to £5 million price bracket saw prices decline by 0.4%.
While still impacted by the new levy, prices for homes above the £5 million threshold have risen as demand from international buyers, who are able to take advantage of the weak pound, has boosted the market.
On a regional level, the average price for a prime country property in the South West increased by 1% during the quarter. Prices for prime homes in Wales and the South East saw the next largest increase over this time, up by 0.6% and 0.5% respectively.
Agents report that some local markets have been benefitting from the emergence of new sellers who have set more realistic asking prices for their homes, combined with a release of pent-up demand from buyers. This localised outperformance is most noticeable in key commuter towns. Prices in and around Ascot are up 2% on the year, while prices around Esher have risen by 3%.
In Oxford, demand from individuals relocating from London, as well as local buyers, has helped to push price growth to 4.8% over the past year, the largest increase in values of all the markets covered by our index.
Buyers continue to be attracted by the area’s good schools and limited new stock coming to market over the past year has resulted in cases of competitive bidding which has pushed prices higher. Prices in Winchester have risen by 2.9% so far this year.
‘My advice to vendors would be to show patience, yet to not be frightened of taking a first offer. The fall through rate has never been so high due to shifting confidence and, therefore, vendors should have their lawyer prepared to exchange within 10 working days to avoid this,’ said Sweeting.