By Nicky Burridge, Personal Finance Corespondent, PA News
The country house market staged a recovery during the first half of the year following a revival of City bonuses and increasing confidence in the economy, figures showed today.
Estate agents Knight Frank said the average price of a prime country home, such as a manor house or cottage, rose by an average of 10% during the six months to the end of June.
The rise follows a weak 2003 in which prices fell by 0.5%, with the price of manor houses in the South East dropping by 7%.
The group blamed the weakness on the absence of large City bonuses, which it said markedly reduced the number of buyers from London, traditionally the largest source of country house purchasers.
At the same time it said the Iraq war and poorly performing stock market hit people's confidence, while there was also a significant fall in the number of foreign buyers, particularly from the US.
But it said the market began to pick up in the autumn as the stock market improved, people became more confident in the economy and City bonuses returned.
It said the strong recovery during the first half of 2004 had been seen across all regions of the UK and all types of property, particularly those prices over £4 million.
During the year to the end of June farmhouses performed the best, with typical prices rising by 13%.
It said a typical farmhouse with five or six bedrooms and 10 acres of land would now sell for around £1 million.
The price of cottages also increased strongly during the past 12 months, rising by 12.7% to between £400,000 and £450,000 for a three bedroom property with an acre of land.
At the same time the cost of a manor house rose by 9.7% to around £1.9 million and £2 million during the past year.
The figures come as property website Hometrack said the price of all homes in England and Wales dipped by 0.1% during the month to August 18 to average £152,100 as the market continued to fell the affects of recent interest rate rises.
Rupert Sweeting, partner in the country department at Knight Frank, said: "We have seen a resurgence in the country homes market, with strong house price growth across all types of country homes, and in practically all regions of the UK.
"However, as with most years, price increases tend to occur in the first six months of the year with the market levelling off in the last two quarters.
"We don't expect price falls but we do anticipate that prices will stabilise over the coming months."
He said the South East, which suffered due to a lack of buyers last year, had recovered particularly well, with country home prices rising by an average of 10%, more than making up for the fall seen during 2003.
At the same time the price of a typical three-bedroom cottage in the North rose by 13% during the first half of 2004.
ends
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