The prime country house market is price sensitive, but moving

Prime Country House prices to rise by 1.5% this year, predicts Knight Frank

Prime country house values nudged up by the smallest of margins, rising by 0.1% between April and June according to Knight Frank’s latest index; that leaves prices 0.2% up on the year (a slight improvement on the 0.1% fall reported in the year to March).

More tellingly, a pick-up in deal numbers “paints a positive picture”, says the firm, indicating that this segment of the market is weathering political and economic uncertainty fairly well. Such analysis allows Knight Frank to forecast a 1.5% increase in prime country values in 2017, with price inflation driven largely by a shortage of available stock.

It’s still a thoroughly price-sensitive landscape out there, with buyers and vendors still feeling their way to agreeable common ground in the wake of those tax changes in 2014 and 2016. Unsurprisingly, it’s the realistically-priced properties that are making up the deal numbers.

Knight Frank figures show prime sales volumes rose by more than half between April and May, compared to the same period in 2016 – although “the comparison flatters this year’s performance”, as the 2016 data was hit by the introduction of the 3% additional rate of stamp duty. Even against 2015’s market level, however, sales volumes now are still 29% higher.

As ever, decent locations near string schools and transport links are favoured. Regional town and city markets continue to out-perform more rural settings: KF reports that prime town houses saw values rise by 1% between April and June, while rural home prices dipped by 0.2% in the same period. On an annual basis, prices were 1.5% and 0.4% higher respectively.

Oliver Knight, Research Associate at Knight Frank: “Prime country prices are broadly flat, up just 0.2% on the year, and 0.1% over the last three months. While viewings data and sales volumes points to a more active market, this is not being accompanied by a rise in prices. Rather, agents report that it is vendors who are realistic about pricing are achieving sales.

“An analysis of Knight Frank housing market data in April and June, covering the period leading up to the election, paints a positive picture in terms of prime market activity. Prime sales volumes, for example, rose by more than half year-on-year between April and May, compared to the same period last year. The comparison flatters this year’s performance, as the 2016 data was adversely impacted by the introduction of the additional rate of stamp duty, but even against the level of market activity in 2015, sales volumes were still higher by 29%.”

Cottage Farmhouse Manor House Unweighted average
2012 Q2 -1.8% -2.3% -0.6% -1.5%
2012 Q3 -0.7% -1.1% -0.9% -0.9%
2012 Q4 -0.2% -0.4% -2.7% -1.2%
2013 Q1 0.9% 0.6% 0.1% 0.5%
2013 Q2 1.1% 0.4% -0.2% 0.4%
2013 Q3 1.4% 0.9% 0.3% 0.8%
2013 Q4 1.7% 1.8% 0.9% 1.4%
2014 Q1 3.3% 2.4% 0.5% 1.9%
2014 Q2 1.6% 1.0% 0.8% 1.1%
2014 Q3 0.8% -0.1% 0.3% 0.3%
2014 Q4 1.0% 0.0% -0.3% 0.2%
2015 Q1 1.0% 0.2% 1.5% 0.9%
2015 Q2 1.5% 0.8% 0.7% 0.9%
2015 Q3 1.4% 0.5% 0.3% 0.7%
2015 Q4 1.1% 0.4% 0.4% 0.6%
2016 Q1 1.9% 0.0% -0.4% 0.3%
2016 Q2 1.1% 0.2% -1.0% -0.2%
2016 Q3 1.0% -0.7% -0.4% -0.1%
2016 Q4 0.1% -0.4% -0.7% -0.4%
2017 Q1 1.4% 0.2% 0.4% 0.6%
2017 Q2 1.0% 0.3% -0.6% 0.1%