Country house prices in the UK have risen for the first time since the beginning of the property downturn with values up 2% in the three months to the end of September, the latest research shows.
The ripple effect of buyer demand is beginning to filter out from London into prime regional markets across the UK with the south east of England showing the strongest signs of recovery, according to property consultants Savills.
Prices in the South East reached bottom at the end of March then began to rise by 1.8% in the second quarter of the year. This has continued with the third quarter showing a 2.2% increase.
‘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,’ said Lucian Cook, director of residential research at Savills.
The top five commuter locations in terms of growth in value in the past six months are Hampshire, up 9.7%, Berkshire up 5.5%, Essex with growth of 4.4%, Cambridgeshire up 4.3% and Kent on 4.2%.
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, explained Cook.
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, pri
me 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, the research indicates.
Also a clear buyer preference for quality is emerging with the market continuing to favour the very best properties in the most popular locations. Over the past six months prices for the best 10% of country houses worth on average £1.4 million have been boosted by over 13% whereas the bottom 10% by quality, worth on average £621,000 have lost 4.3% of their value.
Cook believes that the growth is sustainable. ‘Market conditions are looking more favourable than at any time since the market turned down. Our key demand indicators, such as the number of new applicants, viewings, deals agreed and exchange levels started to rise in the late spring and by the end of September stand at relatively high levels across all prime regions of the UK,’ he said.
He added that 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 twelve months.
‘We don’t rule out a degree of volatility in the coming year. But we absolutely stand by our forecasts that the prime markets will see a period of sustained recovery over the next five years,’ he concluded.