Country homes experience worst price falls for 13 years

Research from Knight Frank shows that prices in the prime country house market fell by 3.9% during the second quarter of 2008, the most severe fall since its index began in 1995.

Cottages were worst hit, losing 5.7% of their value, while prices for manor houses fell by 1.9%.

Liam Bailey, Knight Frank’s head of residential research, said: “After a period of static conditions, the malaise in the UK’s housing market has finally begun to depress values for prime country houses.

“For the first time in three years, prices fell for all property types, although it was most significant for cottages at 5.7%, followed by farmhouses at 4%. These homes tend to attract workers in the professions, who are becoming more cautious in the wake of a more pessimistic economic outlook.

“For the first time since 2005, prices for prime country houses have fallen on a year-on-year basis - and, at 2.8%, by the biggest margin in the history of the index. In the Midlands and South, there has been a noticeable drop in the number of properties coming to the market, perhaps because sellers are opting to wait until the market improves.”