The price of country homes fell by nearly four per cent during the second quarter of the year as the problems caused by the credit crunch spread to the prime property sector, figures have shown.
Estate agents Knight Frank said the average cost of a prime country property dropped by 3.9 per cent during the three months to the end of June, the biggest fall since the index began in 1995.
It said three consecutive quarters of sliding prices meant that annual house price growth in the sector had now turned negative, with the properties losing 2.8 per cent of their value during the past year.
Liam Bailey, Knight Frank’s head of residential research, said: “After a period of static conditions, the malaise in the UK’s housing market has finally begun to depress values for prime country houses.
“For the first time since 2005, prices for prime country houses have fallen on a year-on-year basis and, at 2.8 per cent, by the biggest margin in the history of the index.”
He added that it was also the first time for three years that all types of property had recorded quarterly price falls.
Cottages have been worst hit by the housing market downturn, with the average price of a top country cottage with three of four bedrooms and at least an acre of land dropping by 5.7 per cent during the second quarter to average £525,900 – 6.5 per cent less than 12 months ago.
Farm houses were also badly affected, with their prices sliding by four per cent.