Sales in the £5m+ country house market has hit a 15-year high in the 12 months to October, driven by strong domestic demand.

Newly released data from Knight Frank shows that there were 168 sales above £5m+ in the UK outside of London, an increase of 112% versus the five-year average, whole-market data shows.

Above £8m, there were 96 sales, which was up 269% compared to the five-year average.

London-based buyers were particularly active, as they have been since the pandemic as part of the so-called ‘race for space’, making up 41% of Knight Frank sales in the period. In the 12 months to October 2019 the share was 24%.

“The upper end of the market has shifted away from overseas buyers since the pandemic, in favour of domestic consumption, although buyers from the Middle East and Asia are now returning,” said Stuart Cole, head of North Surrey sales at Knight Frank.

“Buyers from London are typically looking for space and greenery but with connectivity to the capital,” he added.

Knight Frank says part of this homegrown demand for high-value property outside of London is the result of thewealth creation that has taken in recent years. While the pandemic has been challenging overall, some sectors of the economy such as financial, legal and professional services have performed strongly, and bonuses have risen sharply as firms look to attract and retain talent.

There was a 14.4% increase in the number of high-net-worth individuals (HNWI) in the UK in 2021, taking the overall number to close to five million, according to The Wealth Report 2022.

In prime central London (PCL), pent up demand since the easing of international travel restrictions is boosting sales volumes in the capital’s £10m+ residential market, in a further sign of strong activity in high-value UK markets.

The £5m+ country house market has been the top performing section of the market for price growth in nine out of the ten quarters, with demand supported by relative value.

In the years before the pandemic, price growth for higher-value properties was weaker than the mainstream market due to a series of tax changes and political uncertainty.

In the decade to March 2020, the average price of a £5m+ property outside of London increased by 29% compared with 75% in the UK mainstream market. The top-end of the market is now playing catch-up.

Knight Frank forecast that UK prices will fall by around 10% over the next two years as the lending landscape becomes tougher after 13 years of ultra-low rates.

However, prime regional markets will be more insulated than the rest of the country due to lower levels of mortgage debt and tight supply.

Cash buyers in the £5m+ country market have made up 58% of sales over the last ten years compared to 32% in the mainstream market outside of London.

“There remains a shortage of supply and deals are still happening despite some caution creeping in,” said Rupert Sweeting, head of national country sales at Knight Frank. “However, buyers often face a once-in-a-lifetime opportunity. We sold a £16m house in Oxfordshire this year that hadn’t come to the market in four generations, which shows there is always demand at the top end.”