The annual price growth of country house prices grew by 2.3 per cent in the third quarter of this year, the strongest rate since early 2016.
This is according to the Knight Frank Prime Country House Index, which posted a quarterly growth rate of 2 per cent.
The spike in activity in March 2016 was due to the impending 3 per cent stamp duty surcharge on second homes as buyers rushed to complete ahead of its introduction.
This time, Knight Frank says that buyers’ desire for space and greenery after lockdown continues to drive the market.
Connect chief executive Liz Syms comments: “We have seen a trend towards people looking for houses rather than flats and looking for houses in the countryside or on the edge of towns.
“There definitely seems to be a preference for houses with more space as Covid and the ongoing move to home working has clearly made people re-evaluate where they are living.”
The record-breaking run of activity during the summer months was due to pent-up demand, says Frank Knight, and September saw an all-time record for the number of offers accepted outside of London. Combined with the stamp duty holiday announced in July, this has helped keep deal activity high.
Knight Frank senior research analyst Chris Druce says: “A record-breaking run of activity driven by a race for space post-lockdown, has sealed the recovery in the country house market and translated into the strongest price growth seen in more than four years.
“Despite a challenging economic outlook, people’s desire to get on with their lives after years of political uncertainty followed by lockdown has seen the property market continue to defy gravity, although there are signs that it is starting to normalise.”
Higher value properties
Price growth for higher-value properties has also been weaker than the wider market in recent years due to a series of tax changes, leaving greater scope for future rises.
Every value band recorded price growth in Q3 with the £3m to £4m band recording the strongest quarterly growth of 2.9 per cent.
Properties valued above £1m recorded price growth of 2.3 per cent while homes under £1m grew by 1.8 per cent.
Supply and viewings starting to level off
Frank Knight says there are signs that supply may be about to become more constrained and with winter approaching some people will now wait until the spring to list their property.
While the number of property viewings recently have been at 35 per cent above the five-year average, they too have been moderating. This suggests demand is softening due to the resurgence of the Covid-19 virus, rise of local lockdowns and weakening job market.
Lengthening delays caused by a conveyancing system under increasing strain as people race to complete in time for the end of the stamp duty holiday on 31 March next year, could see some deals fall away in the coming weeks.
