Country house prices rose for the first time in two years in the third quarter of this year, analysts say. According to Knight Frank, prices increased 1 per cent nationally for country homes valued at GBP500,000 (HK$5.5 million) or more between July and September. Buying activity is strongest in the Home Counties as London's mini-boom ripples out into the countryside. Andrew Shirley, head of rural research at Knight Frank, says prices have risen 3 per cent in the Home Counties since March last year. This compares with a modest 0.3 per cent rise in the Midlands and falls of 0.1 per cent in the southwest and 5.3 per cent in the north and Scotland over the same period. City of London finance workers and overseas investors have been venturing out of the London property market into the countryside since last spring. 'You can see the affects of the increases in London filtering out to the Home Counties and then spreading out more generally to the rest of the country,' Shirley says. 'More overseas buyers are buying in the posh enclaves of Hampshire and Surrey.' Prices are rising most strongly for multimillion-pound homes, including manor houses, he says. Buyers of these properties pay mostly in cash, so are less troubled by the lack of mortgages that continue to pull the lower end of the market down. Many buyers stayed away during the downturn last year, but now this pent-up demand is being unleashed on the market, he says. 'People who have waited a year but now have to move for family reasons or other reasons see now as a good time to get back into the market because mortgage rates are low, prices are a bit lower,' Shirley says. 'That bounce in demand is pushing prices up.' Jonathan Bramwell, head of country at buyer agency Prime Purchase, says British expatriates relocating from Hong Kong are buying homes for retirement or close to schools for their children. A country house in the Home Counties has been sold to a Chinese buyer, a sign that the much expected influx of mainland investors has started, he says. Bramwell says prospects for the country house market are uncertain. 'There is a general election coming up, so the market will go into limbo,' he says. 'A Conservative government will be elected and some say this can only be good news for us.' He advises buyers to hire a British-based solicitor because they will run a money laundering check on them, which will improve their credibility with sellers. He also recommends buyers get expert advice when choosing a property, so they know its true value. Country houses on the market through Knight Frank include Malverleys, a GBP12 million home in Hampshire which comes with parkland, walled garden, swimming pool and tennis courts. The company is also marketing Ashenden, a Grade II-listed Georgian house in Kent with 38.5 hectares of land, on offer for GBP4.35 million.