City bonuses help boost rural sales

Booming City payouts have helped the rural residential property market recoup all of the ground lost in 2004 and early 2005, according to new figures from top-end agent Knight Frank.

The firm’s latest Prime Country House Index shows an overall 2.5% growth in values last year.

Manor houses rose 3.5%, with the average property worth almost 2.6m. Farmhouses were up 2.9% to 1.1m, but cottages saw more limited growth of 1.1%. Even so, the average cottage was priced at 485,000, said Knight Frank.

Head of research Liam Bailey said: “The final three months saw a break from the traditional Christmas slowdown with viewings up 68%.

Wide publicity surrounding City bonuses prompted some purchasers to attempt to avoid competition and the forecast increase in property prices early in the New Year stemming from the extra money entering the market.”

Mr Bailey said there was also strong demand from other major regional centres as confidence returned to the market following a cut in interest rates and the realisation that a price crash wasn’t likely.

Values would grow by 4% in 2006, with the best properties up 7%, he predicted.