Adjusting to the New Normal, Knight Frank Prime Country Review

Price growth in the prime country house market has slowed in 2015, as Oliver Knight examines the data.

Key findings: 

  • Prime country house prices have risen by 2.7 per cent on average over the year to September
  • Stamp duty reform, announced in December 2014, continues to weigh on activity and price growth at the top end of the market
  • In Scotland, the number of £1 million+ sales has fallen by 52 per cent since the introduction of the LBTT
  • Price growth in prime town and city markets including Oxford, Bath and Bristol has been more robust
  • Farmland values remained steady in Q3 2015 as the market enters a period of equilibrium

Oliver Knight, Knight Frank Residential Research, said:

“Outperformance in prime urban markets has been driven by continued demand from buyers for homes in key town and city locations and a relative shortage in the number of homes for sale. Prices in prime urban markets are now, on average, 3 per cent above their previous market peak.

“In recent years, a return to economic growth has given a number of these towns and cities an additional lift with an improving business environment helping contribute towards higher demand for housing as people relocate to an area for work, or look to move up the ladder locally.

“As the economy continues to recover and house prices outside of London show further growth, the trend for more London buyers to move will gain traction, boosting the ripple effect of house price growth from the capital. Meanwhile, infrastructure improvements will enhance the appeal of these areas further, as well as opening up more rural markets.”