Property News > Prime country house market in the UK seeing prices rise
Prime country house market in the UK seeing prices rise
The first half of 2018 saw prime country house prices in the UK increase by 0.9%, but the latest index shows notable regional variations in this sector of the property market. According to the data from Knight Frank’s prime country house index, house prices in this sector are up 10% over the last five years. However, this is showing signs of slowing down, with average increases of just 0.7% over the last 12 months. Despite the reduced average growth, the Midlands and the North continue to fare well, with both regions up 3% year on year. Meanwhile Harrogate, Cheltenham and Bristol also performed above the national average. Oliver Knight, research associate at Knight Frank, believes that despite a few years of subdued price growth, rural markets still provide good value overall, although buyers remain cautious after a long period of political and economic uncertainty. ‘This has kept a check on prices, but well-presented and competitively priced homes continue to sell,’ he said.Knight also highlighted that regions beyond the London commuter zone have generally experience the highest growth, and the ongoing pressure on property prices in prime central London is being reflected in the markets immediately surrounding the capital.Prime urban areas have experienced average house price rises of 16% over the last five years, whereas rural markets are looking better value after a few years of subdued growth. ‘As demand picks up we expect to see house price growth in rural locations converging with urban markets,’ Knight explained.He also warns that the data suggests houses need to be valued realistically from the outset and that three years has passed since the overhaul of stamp duty, with the market above £1 million remaining price sensitive. The analysis of prime market sales data over the last 12 months shows that homes tend to sell faster when sold within 5% of their original asking price, as opposed to when large discounts are made to attract buyers. Listings data from Rightmove shows that 28% of the homes valued at £1 million or over listed for sale at the end of May were reduced from their original asking price, down from 32% in November 2017 when the figures peaked. This serves as evidence that the market is adapting to the higher tax environment. ‘Any fall, or levelling off, of this figure suggests that valuations are becoming more aligned with current buyer sentiment,’ said Knight.Looking ahead, Brexit continues to cause uncertainty among vendors and buyers, although the firm suggest the impact of this should not be overstated. There is also expected to be a gradual rise in interest rates later this year. ‘This underpins our forecast for fairly modest price growth in prime regional markets in 2018 of 1.5% and for 2% growth in 2019,’ said Knight.