Prices for prime country houses in England and Wales rose 0.4% between January and March 2018, showing the market has improved—even if just moderately—since last quarter’s 0.2% decline, according to a report Tuesday from Knight Frank.
The London-based property consultants track the performance of four country house property categories with prices in the top 10% of the market: cottages, farmhouses, townhouses and manor houses.
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Annually, prices have crept up 0.2%.
An imbalance between supply and demand is the main factor supporting the price increases, the report said. With 21% fewer prime properties priced at £1 million (US$1.4 million) and over listed for sale outside of London during the first three months of 2018 compared with the same time in 2017, the prime country house market is leaning in favor of sellers.
The British real estate market’s north-south divide—price growth in the relatively more affordable North of England is outpacing that in the higher-priced South—is being felt across the prime country market, too.
Prices for prime country houses grew most in the North of England, 0.8%, while they declined furthest, down 3.8%, in north Surrey. The poor performance of London’s commuter zone mirrors the weak performance of prime markets in the capital, the report said.
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Over the past 10 years, property prices in urban areas have outperformed those in rural regions, as people are drawn to the increased amenities and transport links in towns and cities. However there has been a softening in prices in town and city markets over the last 12 months, the report said.
"It is interesting to note the shift away from urban town and city markets to more rural homes," said Oliver Knight, research associate at Knight Frank.
"As this demand continues to pick up across the year, we expect to see house price growth in rural locations continuing to converge with urban markets," he said.