This decline in average country house prices comes on the back of very strong price growth during the first half of 2004.
The first six months of 2004 saw average country house prices climbing by over 10% after a very weak 2003. The period from July to September, traditionally a quiet period, saw prices cool rapidly. Average prices for Country Cottages stabilised at £386,000; prices for Farmhouses fell by 1.2% to reach £886,000 and prices for Manor Houses climbed by an average of 0.3% over the three month period to reach an average of £1,749,000.
Why has the UK country house market seen slower price inflation?
Liam Bailey, Head of Knight Frank Residential Research, comments: “The recent weakening in prices relates to the wider slowdown being felt in the UK housing market. Higher interest rates and increasing affordability constraints have contributed to a more cautious attitude being adopted by purchasers. To some extent the slowdown can also be blamed on seasonal factors, summer is always a quieter period. At the same time the prime country house market experienced a very strong first half of 2004 and some decline in price growth was to be expected.”
How have different parts of the UK faired?
Liam Bailey continues, “For the first time Knight Frank have released a full analysis of the prime country house market across the UK. The most expensive counties to buy country property are concentrated in the south of England and represent the usual suspects; with Surrey leading the field followed by Hertfordshire and Buckinghamshire.”
“If you want to buy a country house on a budget, you had better travel to the Scottish Borders, mid Wales, Northumberland, East Yorkshire or Lincolnshire. Although even in these areas you would be lucky to get change from £1,000,000 for the most desirable houses.”
Liam Bailey continues: “The upper end of the country house market is far less affected by base rate movements than the mainstream residential market. Of more significance are factors contributing to general economic confidence, including; stock market performance, oil prices and general economic and political stability.”
Country house categories
Knight Frank tracks the performance of three country house property categories.
1. 1. Manor house prices have risen by 10.4% in the twelve months to September 2004. A typical manor house comprises a large property standing in its own, usually extensive, grounds with a private drive. One such property currently on the market is Lillingstone Lovell Manor, [see photo 1] a nine bedroom house with three cottages, stables, garden and grounds which include paddocks for the horses at a guide price of £2.25m.
2. Farmhouses rose by 11.4% in the twelve months to September 2004. A typical farmhouse has between 5 and 6 bedrooms, several acres of land including garden, paddock and barns. An example would be Paddock House Farm situated near Alstonefield in Derbyshire which is currently on the market for £895,000. The main property has four bedrooms as well as two further cottages and outbuildings with potential for conversion and is set in about 35 acres.
2. Prices have also risen at the lower end of the country house market. Country cottage prices rose by 10.0% in the twelve months to September 2004. A typical example has about one acre of land, is detached, and has three bedrooms. Little Alfardisworthy in Devon is one example currently on the market for £375,000. This is truly a rare opportunity to acquire a property which is available on the open market for the first time in 60 years. The property offers peace, seclusion and offers delightful views of the Lower Tamar Lake.
Rupert Sweeting, Partner in the Country Department at Knight Frank, comments: “The third quarter is traditionally quiet. However the seasonal slowdown was compounded by the Governor of the Bank of England’s warnings on house prices in early summer. This led to noticeably lower enquiries from prospective purchasers.”
“Talk in the press of price drops of 30% is sensationalist. We predicted a levelling off which is happening. The glaring outcome of this is that properties are very price sensitive, any house that is either optimistically or over ambitiously priced is neither selling nor being visited by buyers.”
“We have seen a turnaround in the market with purchasers having more choice-certainly in the £500,000 to £1.5million band. It is at this level that buyers are most affected by interest rate rises and general confidence. However we feel that the top of the market will hold up far better with the prospect of city bonuses and a shortage of quality houses available above £2million."
