Prime country house price drop
Saturday, 14 January 2012 10:00 AM
Prime country houses have not been immune to falling house prices, with a 1.7 per cent drop in the final quarter of 2011.
That brings the overall decline for the year to 3.1 per cent.
However these figures are slightly skewed by the performance of the home counties, where prices have only dropped one per cent, whilst in the north west they are down 10 per cent.
Grainne Gilmore, Knight Frank's head of residential research, said: "Despite recent headline price falls, there are marked differences across the regions, with the home counties benefitting from money flowing from London and overseas.
"Overseas buyers, who are very active in the prime central London market, are also interested in larger properties just outside the capital, especially those near the best schools.
"Domestic buyers moving out of prime central London, where prices have reached record highs, are also key players in this market."
Prices of properties worth more than £5m are still rising, up 1.2 per cent on the year. This solidity in the economic storm shows no sign of abating, with viewings up by 13 per cent at the end of 2011.
However Rupert Sweeting, head of Knight Frank's country department, said that the deterioration in economic confidence has "taken a toll" across all property sectors, with the prime market "no exception".
"The real sticking point has been in converting offers into sales. The rate of withdrawal for buyers who have agreed to purchase but who withdraw prior to exchange of contracts has risen sharply this year," he continued.
This could be linked to issues "securing mortgage finance" and increasing "nervousness" about the economic outlook.
"The market, especially for properties worth less than £5 million, is treading water but there is an opportunity for those trading up, as the gap between the value of their current home and the next level up on the ladder is narrower than it has been for quite some time," he added.
Prime country sales are currently 16 per cent lower than the market peak in 2007, however sales in the mainstream UK market have halved over the same period.
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