Positive signs return to prime country house market as price fall halves in first quarter of 2009
Date : 07 April 2009
Key Highlights:
- Prices for prime country houses dropped on average by 4.7% in Q1 2009, compared with a 9% fall in Q4 2008, according to the Knight Frank Prime Country House index
- Average prices have now fallen by 20% in the past 12 months
- The Home Counties saw the smallest quarterly drop, the north and Scotland the greatest
- Sales volumes are now increasing in some areas
Andrew Shirley, Knight Frank’s head of rural property research commented:
“The price of prime rural property continued to reflect the weakness of the general housing market in the first quarter of this year, but the rate of decline has slowed substantially. Average property values fell by 4.7%, compared with 9% in the final three months of last year, according to our prime country house index.
“I think buyers, particularly those with money on deposit at very low interest rates, are certainly starting to perceive that property now offers value for money again, especially in those areas where prices have fallen the most. In the Home Counties, for example, values have fallen by 22.5% from their peak, but have dropped by only 3.7% so far this year.
“It would be premature to rule out any further falls completely, but it does look like we could be very close to the bottom of the market around London and this has been reflected by an increase in market activity in our Home Counties’ offices.
“On an annual basis, prices have fallen the least in Scotland and the north of England and this explains why these areas are now playing catch up, with prices falling by 6.3% in the first three months of the year.”
Rupert Sweeting, Knight Frank’s head of country department said:
“While it would be wrong to say that the market has started to recover across the board, we are undoubtedly in a very different place compared with the end of 2008. Viewings are starting to approach normal levels and we are even seeing a return to competitive bidding in some circumstances.
“More realistic pricing from vendors and a determination by purchasers to get on with their lives means we are now closer to that magic point where both parties’ aspirations neatly coincide. In March, the number of rural houses sold by Knight Frank increased by 1% compared with the same period in 2008, with a particularly strong performance in our Home Counties and South West regions.
“At the top end of the market, the weakness of sterling continues to attract buyers from Europe, Russia and the CIS who are looking in the country as well as in London.”
Prime property performance by sector
|
Property Type
|
Quarter 1 price change %
|
Annual price change %
|
Average value £
|
|
Cottage
|
-4.4
|
-21.1
|
0.44m
|
|
Farmhouse
|
-4.0
|
-19.2
|
1.1m
|
|
Manor House
|
-5.9
|
-19.8
|
2.6m
|
|
Unweighted average
|
-4.7
|
-20.0
|
1.3m
|
Prime property performance (all types) by Knight Frank region
|
Region
|
Quarter 1 price change %
|
Six-month change %
|
Annual change %
|
|
Home Counties
|
-3.7
|
-13.5
|
-22.5
|
|
South West
|
-5.2
|
-13.9
|
-20.8
|
|
Central England
|
-4.7
|
-12.0
|
-19.2
|
|
North and Scotland
|
-6.3
|
-16.0
|
-17.8
|
For further information, please contact:
Andrew Shirley, head of rural property research, Knight Frank,
Rupert Sweeting, head of country department, Knight Frank,
Davina Macdonald Lockhart, residential pr manager, Knight Frank,
Ends
Notes to Editors
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 196 offices, in 38 countries, across six continents. More than 6,770 professionals handle in excess of US$700 billion (almost £355 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.
About Residential Research
Research provides strategic advice, consultancy services and forecasting to a wide range of clients worldwide including developers, investors, financial and corporate institutions. Our research reports are available at www.knightfrank.com/research
About the Knight Frank Prime Country House Index
The Knight Frank Country House Index is a valuation based index, compiled quarterly from valuations prepared by professional staff in every Knight Frank Country House office in the UK. The index is based on the valuation of a comprehensive basket of properties throughout all UK regions based on actual sales evidence.
Knight Frank tracks the performance of three country house property categories; cottages, farmhouses and manor houses. A typical manor house comprises a large property standing in its own, usually extensive, grounds with a private drive. A typical farmhouse has between five and six bedrooms, several acres of land including garden, paddock and barns. A typical cottage has about one acre of land, is detached and has three/four bedrooms. Detailed definitions of the three property types are available on request together with current case studies of properties being marketed.