Prime country house market follows fortunes of Prime Central London

Prime country house values in the Home Counties increased by nearly 14% last year and are anticipated to increase by another 15% this year according to the latest from Savills residential research.

The final quarter in 2006 saw the highest quarterly growth in the prime country house market since Q3 02

5% growth anticipated in the Home Counties for 2007

Values in Prime Scotland showed highest growth for the fourth successive year in 06

Across the UK residential values grew 9.3% compared to 11.3% in Greater London in 06

The top end of the prime country house market (over £5m) has outperformed other price brackets since Q2 05

Yolande Barnes, director Savills research comments, “The Home Counties are most affected by activity in London and remain the popular preserve of the stockbroker as commented upon in previously published Savills research”.

The top end of the prime country house market, over £5million, is the real out of town success story. It has out-performed all other price brackets since mid-2005 as an abundance of cash-rich buyers have competed for scarce, large family houses and exclusive ‘trophy’ properties at premium prices. (See chart as photo)

Throughout all of the prime country house regions, annual growth in residential property was significantly higher last year than in 2005. Prime property in Scotland saw the best performance in 2006, recording annual growth of 15.7% compared with 5% in 2005. The most dramatic turnaround occurred in the Eastern counties which moved from a decline in values in 2005 to a 10% growth in 2006.

Barnes again, “Our forecasts remain bullish for the prime markets despite last week’s surprise interest rate rise. Prime markets are driven by capital expenditure rather more than debt finance. Much of this capital comes from overseas and from city bonuses and other sources of wealth – so prime markets are much less reliant on borrowing than the mainstream markets and consequently, less prone to interest rate changes. We see little reason for demand levels to change this year, given the continuing large amounts of global capital still available to a wide variety of buyers. Equity and other investment markets also look set fair for the coming year. This, coupled with the severe supply constraints that characterise the prime country house markets, should put further upward pressure on prices.”