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Country homes market 'improving'

12:49pm Monday 6th July 2009

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The rate at which the price of desirable country homes is falling has slowed during the second quarter of the year as the market showed signs of improving, an estate agent said.

The average cost of a prime country property fell by 0.9% during the three months to the end of June, compared with a 4.7% fall during the first quarter of the year, according to Knight Frank.

But the Home Counties bucked the downward trend, with the price of country properties, such as manor houses and farmhouses, there rising by 0.8%, as buyers returned to the market.

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% during the quarter.

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."

He said the group sold more properties in the Home Counties in June than during any month for the past three years, while there was also a 15% increase in potential new buyers registering compared with the same month of 2008.

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% 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.

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