Country house market in the UK sees prices continue to fall
The price of prime country houses in the UK is falling, with values down overall by 2.3% year on year, the latest quarterly index shows.
But there is a sign of improvement in the sector as average prime country values in England and Wales declined 0.1% during the quarter, taking the annual change to -1.7%, up from -2.3% in the second quarter of the year.
The index from Knight Frank also says that price adjustments in the country house market attracted more buyers to some markets between June and September, leading to a moderation in price declines.
Broken into types of property, the data shows that the biggest fall has been for manor houses, with prices down by 2.6%, followed by cottages down 2.4%, townhouses down 2.2% and farmhouses down 1.7%.
The index report points out that prices have been falling on an annual basis for five consecutive quarters, though the process of moderation began in 2016 following the European Union Referendum.
‘As prices have adjusted to reflect market conditions over the last three years, agents report a rise in buyer activity as they perceive value in certain locations. This is particularly the case in higher price brackets, where price adjustments have been most notable,’ said Oliver Knight, residential research associate.
He pointed out that Knight Frank sales data shows an 8% increase in transactions for properties valued at £3 million or more between January and August 2019, compared with the same eight month period in 2018.
‘Political rhetoric has ramped up in recent weeks, and uncertainty surrounding the UK’s future relationship with the European Union and what this may mean for the economy continues to be the biggest single constraint on prime markets,’ he explained.
‘Against this backdrop, however, sales activity has been relatively resilient. This has been helped by a more active market in prime London, given that the flow of buyers from the capital continues to be a key driver in prime country markets,’ he added.
He also pointed out that price falls in the prime London market have started to moderate, and buyer interest is reaching record highs. Knight Frank buyer data shows that the number of Londoners who purchased properties valued above £2 million outside of the capital between January and June 2019 was at its highest level for any corresponding period since 2011.
The number of prospective buyers currently looking to purchase a property in prime country markets with Knight Frank with a budget of at least £2 million is 9% higher than at the same point in 2018, which suggests a robust level of demand within this market.
‘However, despite strong demand, supply remains constrained as vendors hesitate due to the political uncertainty. Whilst this is likely to put a floor under pricing to some extent, prime markets will remain price sensitive for the remainder of 2019 and 2020,’ Knight added.