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Value of country homes back in growth territory

The South-East has shown the strongest growth since reaching the bottom of the market at the end of the first quarter this year, with values up 2.2% in the latest quarter, building on a +1.8% growth from April to June.

"This growth has been fuelled by strong quarterly house price growth in the prime suburbs (+3.8%) and prime regional towns (+3.6%) which have caught the first and strongest waves in the ripple effect from the prime London markets," Cook said.

Like London, these are equity rich prime markets which are now being driven by high levels of pent up demand from domestic buyers keen to get on with their lives and strongly influenced by low levels of good property for sale. The top five commuter locations in terms of value growth over the past six months are: Hampshire +9.7%, Berkshire +5.5%, Essex +4.4%, Cambridgeshire +4.3% and Kent +4.2%.

In addition, established prime relocation locations such as Gloucestershire, Devon and Cornwall have seen positive growth this quarter, up +4.4% and +6.4% respectively. Further north, prime towns such as Harrogate and York are just beginning to benefit from the ripple effect, suggesting a recovery curve some six months behind prime central London.

Demand is still heavily dependent on cash purchasers and clearly influenced by limited stock. As potential sellers seek to benefit from the improved market conditions, Savills Research expects some of the current pressure on prices to ease over the next six to 12 months.

"We don’t rule out a degree of volatility in the coming year," said Cook. "But we absolutely stand by our forecasts that the prime markets will see a period of sustained recovery over the next five years."

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