Luxury country houses follow London trend as the rural property market slows down

Owners of luxury country houses have become the latest casualties of a slowdown in the property market.

The number of prime country homes put up for sale for more than £3m during the first half of the year dropped in parts of the country by as much as 26 per cent compared to the previous year.

The slump in sales of rural homes was spread across the majority of counties in the UK, according to a study conducted byCountry Life magazine.

It found that the current slowdown in the sales of London properties had filtered down to affect the top-end of the country homes market. "Stagnation in the London market is having a profound effect on the rural housing scene," said Penny Churchill, property correspondent at Country Life.

The magazine analysed all the properties advertised in its columns during the first six months of 2003 and discovered widespread drops compared to the previous year.

In Surrey, there was a drop of 22 per cent in the number of homes put on the market, while in Berkshire, sales dropped by 26 per cent and in Oxfordshire by 21 per cent. Wiltshire emerged as the most active county in terms of sales, bucking the trend with 152 homes advertised, a 17 per cent increase compared to 2002.

Northamptonshire, Lincolnshire and Derbyshire all also reported increases in activity, with Derbyshire seeing a five-fold rise in the number of properties advertised, with 36 homes advertised compared with six the previous year.

Despite signs of activities in a handful of counties, the figures demonstrated how the difficulties facing the London market were now hitting country homes, Ms Churchill said.

She said the rural market was being dominated by wealthy, local buyers in regions where the economy was less influenced by what happened in the City.

"Some quite delightful country houses in the Home Counties remain unsold ... and prices have started to fall back towards the levels of two years ago," she said. "With a few notable exceptions, anything priced at more than £3m is proving difficult to sell in all parts of the country."

The findings demonstrate that the housing market remains in the grip of a nationwide slowdown.

But earlier this month, there were signs that the start of the summer had prompted a pick-up, with more sales and a slowing of price falls. A report, compiled by 3,500 estate agents contributing to the Hometrack index, revealed that sales in June rose by 4 per cent, while the sale price as a percentage of the asking price rose for the first time in 13 months.