The UK prime country real estate market has struggled to keep up with London, as average prices have fallen by 1.7 percent in the past year.
Liam Bailey, Knight Frank’s Head of Residential Research, noted that more reliance on domestic buyers and the economy are the keys to understanding the sector’s underperformance.
Although London’s prime real estate has appreciated 36 percent since March 2009, prime country houses stayed marginally above their post-Lehman lows in mid-2009 at a five percent average. Prices for prime country homes dropped 1.2 percent in Q3 and are now 1.7 percent lower than in September 2010.
International buyers outside the main Surrey estates, such as Wentworth and St George’s Hill, are a rarity.
Even though buyers and sellers in the prime country market are generally wealthier than the average UK buyer, domestic concerns are the key factors. With the country’s economy and wealth creation at a low level, vendors are competing based on price and anything other than an absolutely perfect property cannot be priced ambitiously at the outset.
The flow of buyers coming out of London is fuelling liquidity in the country homes market, providing hope that the capital’s surge might push out a little further.
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