The rate at which the price of desirable country homes in the Midlands is falling slowed during the second quarter of the year as the market showed signs of improving.
The average cost of a prime country property in central England fell by 0.3 per cent during the three months to the end of June, compared with a 4.7 per cent fall during the first quarter of the year, according to estate agent Knight Frank.
There were also signs of recovery at the top end of the market, with homes costing more than £5 million across the whole of the UK seeing a price rise of 2.2 per cent during the quarter.
It is the latest positive sign for the property market after house prices in the West Midlands rose 1.8 per cent in the past two months.
Andrew Shirley, Knight Frank’s head of rural property research, said: “We are now seeing real evidence that we are very close to the bottom of the prime country house market with prices already rebounding slightly in some areas.
“Ironically, it appears that London, which initially looked like it was going to be hit hardest by the credit crunch following the collapse of financial giants like Lehman Brothers, has recovered in confidence the quickest. Well-paid City workers now feel more secure in their jobs and sizeable bonuses already seem to be back on the agenda.”
The average cost of a prime country property across the country fell by 0.9 per cent during the quarter, down from 4.7 per cent in the three months to March.
But the Home Counties bucked the downward trend, with the price of country properties, such as manor houses and farmhouses, rising by 0.8 per cent, as buyers returned to the market.
Price rises were also strong in the Cotswolds, where many Londoners buy second homes, with the average cost of country houses in the area rising by 3.4 per cent during the three months.
But the group cautioned that despite the improvement seen in the Home Counties and Cotswolds, it was too early to say the market was on its way to full recovery.
Scotland continued to see steep price falls of 6.3 per cent during the second quarter while the value of country property dropped by four per cent in the North East and by three per cent in the North West.
Rupert Sweeting, Knight Frank’s head of country department, said: “Vendors holding off on a sale in expectation of a quick return to the market peak of 2007 will be disappointed. Likewise, anyone who thinks now is the time to increase the guide price of the house they are selling may struggle to attract interest.
“Purchasers remain price sensitive and the market is still finely balanced – it would be easy to trample the green shoots before they had really emerged.”
The cost of prime country houses in central England fell 16.2 per cent in the 12 months to the end of June. UK-wide, there was a 17.5 per cent fall, compared with a drop of 20 per cent in the year to the end of March.