The first half of 2014 saw the highest growth, with a slowdown during the second half of the year attributed to tighter mortgage lending, May's impending election and the prospect of higher interest rates.
Prime markets in the south west of England - including Bath, Bristol and Sherborne - performed particularly well, boosted by rising property values in the capital and surrounding commuter towns, as Londoners look to 'cash-in' and move to the country.
December 3 was the busiest day of 2014 in terms of transaction levels, with buyers keen close deals valued above £937,500 before the new stamp duty regulations came into force.
Prime cottages, or homes with about an acre of land and four bedrooms, saw the highest price growth, with values rising by 6.8 per cent over the course of the year. Farmhouses with more than six bedrooms, outbuildings and several acres of land increased by an average of 3.4 per cent, while values of country manor houses with extensive grounds rose by just 1.4 per cent.
Knight Frank researcher Oliver Knight says: "A combination of higher stamp duty costs for properties worth over £2 million and concerns over the possible introduction of a mansion tax meant that price growth for larger country houses was slower in 2014 when compared to homes [generally cottages] valued at under this threshold."
Prices still remain 16 per cent lower than they were at the previous market peak in 2007 and Knight Frank forecasts a two per cent rise across the UK prime country market for 2015. It predicts significantly higher growth in key commuter towns where there is a continued demand for housing, including Oxford, Sevenoaks, Bath and Cambridge.
Knight says: "There is perhaps more uncertainty surrounding this election when it comes to the prime property market given the continued debate around mansion tax. As such, we could see some buyers in the £2 million-plus market adopting a wait-and-see approach until the election is decided, which could weigh on activity in the first few months of the year," says Knight.