The country house market ended the year on a high, Knight Frank said, with prices growing £300,000 in the year for an average manor house.

The Knight Frank prime country house index reports a growth of 11.2% in prices during the year to the end of December 2006 – the highest rate of growth since June 2004.

Owners of country cottages, farmhouses and manor houses respectively, saw price growth equivalent to £3,591, £9,580 and £26,358 each month in the year to December, with owners of the most prestigious houses seeing their value rise by £866 a day, every day for a year.

Price growth has been led by the larger manor houses and properties priced at above £3 million, which have seen 17.0% growth in price in twelve months.

Liam Bailey, head of residential research, said: “With the City economy performing well and the prime Central London housing market going from strength to strength, London buyers have taken advantage of continued high price growth and have taken their money out to the country.  The strength of demand over the past 12 months price growth in the country market rise to its highest level since mid 2004.”

“Prices for all property types rose over the final three months of 2006 – country cottages (average price £530,000) were up by 1.9% farmhouses (average price £1,240,000) up 1.7% and manor houses (average price £2,940,000) have increased by 0.5%.” 

“This strong performance of the prime country house market, especially in the South of England, is being driven by both the health of the service sector economy, and importantly the booming financial industries based in the City and Canary Wharf; as well as the shortage of supply that has become critical in many markets across the UK.”

Knight Frank expects a similar phenomenon this year as we move into the 2007 bonus round, with both bonuses and demand expected to be higher than last year.  “These expectations, coupled with current stock levels being at a lower level than the previous year, means we can only expect strong performance in the market in the first half of 2007,” said Liam Bailey.