The Home Counties continue to lead the country house market with Q4 growth of 3.1% and annual growth of 1.4%.
A significant imbalance between supply and demand is helping to push prices upwards.
Andrew Shirley, Knight Frank’s head of rural property research said: "The price of prime country properties in now increasing across the country as the recovery that started in London during spring 2009 continues to spread further into the regions.
"Overall, prices rose by 2.3% in the final quarter of the year and, on average, are just 2.6% lower than they were at the beginning of the year. An incredible performance considering the general mood of economic gloom that followed the collapse of Lehman’s little more than a year ago.
"Property prices in the Home Counties have shown particular resilience, ending the year 1.4% higher. The north of England and Scotland are recovering more slowly with prices down 11% on an annual basis, but up 0.5% in the last three months of the year.
"There are a number of reasons for this upturn in property prices, but the overriding factor is an imbalance between supply and demand. Across Knight Frank’s network of country offices the number of new potential buyers registering with us increased 50% last year and the number of sales grew 28%. At the same time, however, the volume of available property fell by almost a third. What we are seeing is an increasing number of people competing for a diminishing pool of properties.
"Potential purchasers are more confidence because they feel prices have reached the bottom and are no longer worried about buying into a falling market. The cost of borrowing remains low and credit availability is gradually improving. Around London we are also seeing an increasing number of overseas buyers returning to the market with demand for properties over £5million growing significantly towards the end of the year."
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