Prime country houses catch up with market downturn

Upmarket estate agent, Knight Frank, has reported that owners of prime country houses are becoming more realistic when it comes to selling.

Prices for prime country residences fell by an average 16% during 2008 but the decline accelerated in the last three months of the year, when values plummeted by 9%.

City job losses in the fall out from the credit crisis have meant that some of the biggest drops occurred around London where falls of up to 20% have been recorded.

Knight Frank is predicting that the downward trend will be more limited in 2009 and notes that buyer confidence is returning to the market as vendors become more realistic.

The firm’s head of rural property research, Andrew Shirley, explains that the market for prime country property reacted more slowly to the credit crunch than other sectors of the housing market.

However, vendors were forced to adjust their expectations towards the end of last year.

He adds that the very top of the market remains the most resilient with prices for houses worth over £5 million dropping by just under 10%, compared with a 17% fall for houses valued at under £500,000.

The outlook is not so good for those with expensive properties that are not at the top of their class.

Mr Shirley warns that price reductions of 25% or more may be needed to secure sales of properties that do not score at least eight out of 10 against purchasers’ expectations.

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