Encouraging signs for UK prime country house market
Demand for prime property has been robust over the past year, although higher purchase costs continue to act as a constraint on further growth.
1 minute to read
Prime country house prices increased by 0.6% between January and March, according to Knight Frank data. On an annual basis, values were essentially unchanged at -0.1%.
The slight pick-up in prices in the first three months of 2017 is an indication that prime markets are starting to stabilise following three consecutive quarters of price falls.
That said, a closer look at the figures shows that the market is still highly price sensitive, particularly at the top end, which continues to adjust to higher purchase costs following recent changes to stamp duty, something which is examined in more detail in the update.
This process of price adjustment at the top end has taken place alongside a general pick-up in demand, with agents noting that values are beginning to align with buyer expectations.
The number of new prospective buyer registrations has risen by 3% annually over the year to March 2017, Knight Frank data shows. The number of viewings rose by 11% year-on-year over the same period.
Against this backdrop, overall sales volumes have also seen a robust start to 2017. Although fewer deals have been completed in 2017 than at the same point last year – when transactions spiked ahead of the introduction of additional stamp duty – the volume of sales was 5% higher than the comparable period of 2015, and 8% higher than in 2014.
Properties that are located close to good schools and transport links remain popular, particularly in town and city markets, where the property is accurately priced.
However, a shortage of good prime housing stock continues to act as a barrier to further growth in sales volumes and could impact the market over the remainder of the year.
Read the full Prime Country House Price Index.