Country home prices fall 3% in 2011

Published 13 January 2012

Home prices in the country fell by an average of 3.1% in 2011, with regional differences in values, according to the latest Knight Frank Prime Country House Index.

The Index reveals that prime country home prices fell by 1.7% in in the fourth quarter (Q4) of 2011 after a 1.2% fall in Q3.

The Home Counties market has been the most resilient, down 1% on the year, compared to a 10% decline in the North West.

Prices of residential properties worth more than £5 million are still rising, up 0.2% on the quarter and 1.2% on the year, which means that overall prices are 3% higher than post credit-crunch low in June 2009,

Grainne Gilmore, Head of UK Residential Research, comments: “Despite recent headline price falls, there are marked differences across the regions, with the Home Counties benefitting from money flowing from London and overseas. Prices in the Home Counties have been the most resilient over the last year, slipping by just 1%. They are still 10% higher than the market trough in 2009.

Gilmore reports that 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, supporting prices”.

He adds: Domestic buyers moving out of Prime Central London, where prices have reached record highs, are also key players in this market. “

Rupert Sweeting, Head of Country Department, says: “Move much beyond the M25, however, and the market is more heavily dependent on domestic buyers. The deterioration in economic confidence has taken a toll on buyers across all property sectors over the last year and the prime market has been no exception.”