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%.

U. K. Property Prices Continue To Rise

Property prices in the United Kingdom continued to increase in June, indicating broad stability according to reports. The latest index from Nationwide shows a seasonally adjusted 0.1 percent month-on-month, following a 0.5 percent increase in May. Only Northern Ireland saw values fall in the second quarter of 2010. In contrast, the annual rate of house price inflation dropped for the second consecutive month from 9.8 percent to 8.7 percent.

Overall U.K. house prices in the second quarter increased by 1.9 percent quarter-on-quarter. This resulted in an annual growth rate of 9.5 percent, up from 8.8 percent recorded in the first quarter of 2010.

According to Nationwide’s quarterly index, the South West of the country showed the strongest regional growth, with prices up by a seasonally adjusted 3.0 percent, and up 12.5 percent annually.  London had the strongest growth overall.  Its prices increased 13.2 percent in the second quarter. Growth in northern and midland regions was weaker than in the southern regions.

Indicators point to an increase in the number of properties for sale while the level of demand remains stable. “This would in part help to explain the recent slowdown observed in the rate of house price inflation,” said Martin Gahbauer, Nationwide’s Chief Economist.