Prime country house prices rose 0.4% in Q2 2013, the second consecutive quarter of growth, according to the latest Knight Frank Prime Country House Index, Q2 2013.
However, prime property values remain down by 1.2% on an annual basis and are 21% below the market peak in Q3 2007.
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. 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.
Rupert Sweeting, Head of Knight Frank’s Country department, said: “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 4-6 weeks across the country.
“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.”
The increase in stamp duty announced by the Chancellor in the March 2012 Budget for homes valued at over £2million continues to have a noticeable impact on the market. While average prices for sub-£2million homes increased by 0.8% in the second quarter of the year, homes in the £2million to £5million price bracket saw prices decline by 0.4%.
While still impacted by the new levy, prices for homes above the £5million threshold have risen in Q2 2013. Here, continued 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 benefiting 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.
Sweeting said: “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.”
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