Prices for prime country houses have dropped on average 4.7% in Q1 2009 compared with a 9% fall in Q4, according to the latest Knight Frank country house index, while sales volumes are also increasing in some areas. The Home Counties saw the smallest quarterly drop, says the research, while the north of England and Scotland saw the greatest.

Andrew Shirley, Knight Frank’s head of rural property research said: ‘The price of prime rural property continued to reflect the weakness of the general housing market in the first quarter of this year, but the rate of decline has slowed substantially. Average property values fell by 4.7%, compared with 9% in the final three months of last year, according to our prime country house index.

‘I think buyers, particularly those with money on deposit at very low interest rates, are certainly starting to perceive that property now offers value for money again, especially in those areas where prices have fallen the most. In the Home Counties, for example, values have fallen by 22.5% from their peak, but have dropped by only 3.7% so far this year,’ he continued. 

Rupert Sweeting, Knight Frank’s head of country department added:‘While it would be wrong to say that the market has started to recover across the board, we are undoubtedly in a very different place compared with the end of 2008. Viewings are starting to approach normal levels and we are even seeing a return to competitive bidding in some circumstances.’

* More news on the property market and house prices