Falling Prices for Country Houses in The UK

The price of country houses in the United Kingdom has gone down yet again. In the year 2012 during the second quarter the prices went down by 1.5%. Data obtained from the latest release by Knight Frank on country house index shows that the annual price decline has increased to 4.8% from the previous figure of 3.9% in the first quarter. Similarly the decline from the first quarter on country house prices was at a paltry 0.2% compared to the 1.5% in the 2nd quarter. This is a big decline expected to affect the market in the long term.

However, contrary to the trend witnessed, prices for country houses worth about £5 million and more had an increase in their prices. During the first quarter of the year these properties saw an increase of 0.8% on their prices. The increase on price for property worth £5 million and above continues to increase and on the year increase was by a whopping 3.5%. Property owners in London are also benefiting from the increase in prime property prices. A simple example could help to drive the point home, a family owning a home in central London in early 2009 valued at £2.4 million can today sell their home for £3.52 million.

Property prices in London are higher than the previous highs seen in 2009. The price on property in prime central London has risen by 48%.  This increase on prices in London is creating demand for country commuter spots. Prices for prime property in places like Guildford have gone up by 0.2% as a result, while in other areas such as Oxford and Henley they have gone up by 2.5% and 0.5% respectively. According to Grainne Gilmore, the head of research in UK’s residential market at Knight Frank, the current currency movements have affected prime country property market.

The prime country property market today is more attractive for overseas investors. Russian buyers are particularly active in this market segment. The currency movements are making the market attractive to virtually all buyers from foreign countries. Buyers from Singapore buying a home in the UK can enjoy a 40% discount compared to prices in March 2008. This is as a result of the house prices and currency movements. Buyers using the American Dollar have a chance of getting a 34% discount on the price while those using the Euro can get a discount of more than 20%.

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