Knight Frank: Sellers Need to Be Realistic as Country House Values Decline – TNT

Sellers in the UK’s country housing market are being urged to price realistically this spring, as demand softens and wider economic uncertainty weighs on buyer sentiment.

According to Knight Frank’s latest Country House Price Index – which tracks urban and rural property markets above £750,000 outside London – supply in the country market was stronger than demand in Q1 2025, with new property listings up 3% on the year, but the number of new prospective buyers down by 7%. 

The resulting imbalance kept downward pressure on values, with average prices falling 0.3% over the quarter – extending the annual decline to -1.6%, the sharpest drop since Q2 2024.

“Under £3m, the market has been behaving in a fairly normal way,” said James Cleland, head of the country business at Knight Frank. “But this is not a market to be ambitious and buyers are only showing an interest in competitively priced stock. You can sell but only if you are prepared to be pragmatic.”

The latest Country House Price Index report notes that while demand in the country market remains stable at the right price, the higher-value end is more vulnerable to global financial volatility and shifting tax policy. 

Prices above £5m fell by 3% year-on-year, and the number of new applicants in this price bracket dropped 15% compared to Q1 2024.

While recent tariff-related volatility has had only a limited direct impact on the housing market so far, Cleland said the knock-on effects on borrowing costs and investor sentiment are feeding through. 

Five-year interest rate swaps, seen as a barometer of future mortgage pricing, have dipped below 4%, compared to over 4.2% last month, offering some relief to borrowers.

Spring market conditions are also providing some seasonal support. “More stock is coming to the market, viewings are rising, and agents’ diaries are filling up,” said Cleland. 

He noted that sunshine levels in March were 66% higher than the same month last year, a factor which tends to have a stronger influence on buyer activity outside the capital.

Cleland added that recent changes to the non-dom regime and uncertainty around future tax policy have further dampened sentiment at the top end of the market. Nonetheless, he said greater clarity in the months ahead could help trigger decision-making among high-net-worth buyers.