Landlords Wanted
Prime country house prices rose again during the final quarter of 2013, although price growth is varied across price bands. Oliver Knight examines the trends, and shares the forecast for next year.
The average price of a prime country house in England increased by 1.4% in the final quarter of 2013 – the biggest quarterly increase in prices in more than three years. On an annual basis, prices have risen by 3.1%.
A more detailed examination of the data shows that price performance is becoming increasingly dependent on the value of a property. For example, while homes worth under £2m increased by an average of 1.7% over the last three months, price growth for properties in the higher price brackets has been more muted.
The average value of a home worth between £2m and £3m rose by 1%, while the price of properties worth between £3m and £4m climbed by 0.4% between October and December. However, the average price of a home worth between £4m and £5m fell by 0.3% over the same time period. Prices of ‘super-prime’ £5m+ homes proved more resilient due to low stock levels increasing by 2% in Q4.
The higher stamp duty charge for £2m+ properties, introduced at last year’s Budget, remains a key driver behind stronger growth from the lower price brackets, while talk earlier this year about the introduction of a mansion tax for £2m+ homes has also weighed on buyers’ minds at this end of the market.
Demand in the market remains strong – with the number of new applicants registering their interest in buying a prime country home over the three months to December 2013 up 16.1% compared to the same period of 2012. Property viewings were up 7.9% over the same period.
This has led to a rise in the number of prime country house transactions, which were 25% higher in the three months to December compared to the same period last year.
We expect further price growth in the prime country market in the coming year, as improved economic conditions, and the improved confidence engendered by Government stimuli feed in. To this end we are forecasting average growth of 3.5% across all the prime country house market in 2014.
However, as has been the case through 2013, location and price will have the greatest bearing on growth and there are likely to be significant variations in prime house prices across the UK.
Source: Knight Frank.