2014 Forecast: Price Growth for U.K. Prime Country Homes

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The average prime country house price in England increased 1.4 percent in the fourth quarter, the largest quarterly increase in more than three years, according to Knight Frank. 

Prices increased 3.1 percent compared to last year. The price performance, however, varies between price brackets. 

"While homes worth under £2 million increased by an average of 1.7 percent over the last three months, price growth for properties in the higher price brackets has been more muted," the report said. 

The average price for a home valued between £2 million and £3 million increased by 1 percent, while the price of properties worth between £3 million and £4 million climbed by 0.4 percent during the fourth quarter. 

On the other hand, the average price for homes worth between £4 million and £5 million fell by 0.3 percent during the same time period. Prices of 'super-prime' homes worth £5 million and higher increased by two percent due to low stock levels, according to Knight Frank. 

Demand for prime country homes in England remains strong, with transactions increasing 25 percent during the fourth quarter, compared to the same period last year. 

As economic conditions improve and confidence grows with government stimuli, price growth is expected to continue in 2014, with the average price growth forecast of 3.5 percent across all the prime country house market.

"Most confidence [in 2013] has been in the price range up to £1.5 million and we expect this to continue and also rise up to the £2 million to £5 million as buyers come to terms with the stamp duty and possible property tax of some sort," Rupert Sweeting, head of Knight Frank Country, said in the report. "We are confident 2014 will be better than 2013."