There was a marginal rise in prime country prices in the UK in the second quarter of the year, thanks in part to a pick-up in the number of homes changing hands, the latest figures show.
Knight Frank’s prime country house index for the second quarter of the year shows that prime country prices rose by an average of 0.1% between April and June, taking annual growth to 0.2%.
Prime properties in town and city markets continued to perform well, rising by 1.5% in the 12 months to June, and this level of growth is expected to be maintained throughout 2017, according to Knight Frank forecasts.
However, while values remain largely flat, an analysis of Knight Frank housing market data points to a more active market, albeit one that remains price sensitive following changes to property taxation in 2014 and 2016.
Knight Frank reports that a number of vendors are being more realistic about pricing, or willing to negotiate, in order to achieve sales, with prime sales volumes rising by more than half between April and May, compared to the same period in 2016.
However, a shortage of good prime housing stock continues to act as a barrier to further growth in the market. If sustained, this could put upwards pressure on the market over the remainder of the year, which is why Knight Frank forecasts are for a 1.5% growth in prime prices in 2017.
Oliver Knight, research associate at Knight Frank, said: “Prime country prices are broadly flat, up just 0.2% on the year, and 0.1% over the last three months. While viewings data and sales volumes points to a more active market, this is not being accompanied by a rise in prices. Rather, agents report that it is vendors who are realistic about pricing are achieving sales.
“An analysis of Knight Frank housing market data in April and June, covering the period leading up to the election, paints a positive picture in terms of prime market activity. Prime sales volumes, for example, rose by more than half year-on-year between April and May, compared to the same period last year.
“The comparison flatters this year's performance, as the 2016 data was adversely impacted by the introduction of the additional rate of stamp duty, but even against the level of market activity in 2015, sales volumes were still higher by 29%.”