A year ago this week, Liam Bailey, head of residential research at Knight Frank, predicted that ‘the prime UK property market, particularly in London and the South-East, “could cool rapidly” should the financial-services sector see a substantial downturn in profitability, jobs and income’ (Country Life, August 30, 2007). Well, they have and it did. Even leading country-house agents, who’ve seen it all before, have been stunned not so much by the severity of the downturn, as by the speed at which it has happened. But, unlike other sectors of the UK housing market, all of which have been hit in some way by the credit crunch, the country-house market so far shows little sign of grinding to a halt, although it has changed down a gear or two.

For Edward Sugden of buying agents Property Vision (01488 669900) the sector worst affected by the current liquidity crisis has been the market for second homes, especially in the south-west of England, and also the prep-school market, with many parents unable to move because they can’t find buyers for their London homes. However, Mr Sugden expects the market for houses valued at £5 million or more to remain strong, especially in the Cotswolds. ‘It started off in March, with the sale by Strutt & Parker of Duntisbourne House, near Cirencester, for way over the £5m guide price. Since then, more than half a dozen top houses in the region have sold for similarly high prices.’

He points to the current boom in country rentals as further proof of the pent-up demand that continues to build behind the scenes. Compared with recent boom years in the West Country, times are tougher now, agrees Martin Lamb of Savills in Exeter, who, despite the slump in coastal property, recently sold romantic Redlap House in its secret valley near Dartmouth for more than the £5m guide price.

Now Savills (01392 455755) and Knight Frank (01392 423111) are offering idyllic, early-Georgian Bowden House at Bowden, near Dartmouth, with 5½ acres of magical landscaped gardens and woodland in another secret valley, a mile inland from the sea, at a guide price of £2.5m. The elegant, 5,510sq ft rendered stone house, built in 1723 with two wings added in 1823, has three main reception rooms, six bedrooms, four bath/shower rooms, a separate annexe and a coach house (the house and coach house are listed Grade II), all beautifully maintained by the present owners, who have lived there since 1987. The walled kitchen garden is renowned locally, having provided vegetables for the celebrated Carved Angel restaurant in Dartmouth in the 1970s and 1980s.

A preponderance of older buyers, who are less dependent on mortgage finance, is probably the main reason why the Cornish country-house market has managed to buck the general downward trend this year. Only last week, the Truro office of Savills (01872 243200) exchanged contracts on historic, Grade II*-listed Roskruge Barton, at Manaccan, one of the Lizard Peninsula’s most important houses, for ‘hundreds of thousands more’ than the £1.5m guide price, after spirited bidding by three potential purchasers—one local, two from London.

With the second-home market drying up and trophy houses losing their lustre, Andrew Hay of Knight Frank has already seen the country-house market pulling back to its traditional heartland areas within commuting distance of London, with jobs and schools the main focus of buyers’ attention. Country houses around towns such as Guildford, Hungerford, Oxford, Sevenoaks and Winchester will continue to hold their own, he suggests, with good family houses such as Hunton Court, near Maidstone, Kent, which sold for £6.2m against a guide price of £5.5m, always in demand.

Even at the lower reaches of the market, there are plenty of buyers out there, says Andrew Rome of Knight Frank in Winchester, who had 10 potential purchasers on his doorstep within days of an article in Country Life (August 13, 2008) featuring the late Anthony Minghella’s former Test Valley retreat, Dairy House near Stockbridge, at a guide price of £1.4m.

One-off houses, such as Duntisbourne, which can genuinely be described as ‘top of the form’ or ‘best in class’, will always sell, whatever the state of the market, says Henry Holland-Hibbert of Strutt & Parker, whose farming colleagues pulled off the estate deal of the year with the sale of the 2,499-acre Tetworth Hall estate in Bedfordshire for more than the £20m guide price. Generally speaking, however, Mr Holland-Hibbert is ‘disappointed’ with the 40% drop in transactions seen across the board this year, with buyers, on the whole, in wait-and-see mode, and vendors unwilling to commit to putting their houses on the open market in case they don’t sell.