Sales of expensive UK country houses rose in June, signalling a possible recovery in demand as buyers are tempted out by lower prices after an extended slump.
The estate agency Knight Frank said the number of exchanges of contract for sales of country houses – defined as a rural home worth more than £750,000 – was up 7% in June compared with last year as the number of properties for sale rose while prices fell.
Second-home owners are driving the increase in properties coming to market, the agency said, after recent council tax changes designed to level the playing field for local people living in popular holiday spots. Councils in Wales have the power to quadruple taxes on second homes, while English councils can double taxes.
The number of country houses coming on to the market was 9% higher in the second quarter of the year compared with last year.
“Prices are correcting and as a result activity is noticeably picking up,” said James Cleland, the head of the country business at Knight Frank. “June was busy, and a number of deals were agreed in all price brackets, which means the next few months look even better for exchanges. It’s all about pricing. If you get it right, buyers pounce but if you get it wrong, not a lot happens.”
Covid lockdowns prompted a wave of people to decide to move away from cities in favour of countryside homes five years ago – a trend that resulted in a “race for space” across the housing market.
Demand, however, subsequently cooled. Average country house prices fell 3.5% in the three months to June, according to the estate agent’s price index. That was faster than the 1.6% decline in the year to March.
Other factors in the glut of rural homes coming to market were a stock overhang caused by March’s stamp duty cliff edge, and buyers reactivating plans put on hold last year as a result of the political upheaval.
Knight Frank said there were only 5.9 potential buyers for every new instruction to sell a country house, compared with nearly 19 at the peak of the pandemic exodus from cities. The last time buyers were in such a strong negotiating position was in the second quarter of 2018, during the turmoil over the UK’s Brexit deal with the EU under Theresa May’s Conservative government, it added.
after newsletter promotion
Knight Frank judged that it was the “most favourable market for buyers in the country for seven years”.