Country market could avoid ‘cliff edge moment’ – Knight Frank

There are positive signs that the country market could avoid a housing downturn, Knight Frank claims.

Analysis by the agent found while viewings were down 16% annually versus the five-year average in August – attributed to more people holidaying abroad - there is still strong demand in the pipeline and the number of active buyers was unchanged on last year.

Meanwhile, offers accepted were up 33% last month versus the five-year average, which Knight Frank suggests could mean transaction volumes remain high in the coming months. 

At the same time, supply continues to build from a low base as buyers look to capitalise on rising prices and act before mortgage rates rise further, which will keep downwards pressure on prices, according to the agent.

The analysis said: “Due to the stamp duty holiday and renewed interest in country living since the pandemic, many buyers have either missed out or have found the cupboards relatively bare at times, choosing to hold off from listing their own homes as a consequence, which has in turn exacerbated the shortage of housing stock.”

Knight Frank said the amount of stock for sale in the country market has been “gradually increasing” and is now 25% down annually, the narrowest gap since October last year, which was just after the end of the stamp duty holiday.

Charles Davenport, head of the Elmbridge region at Knight Frank, said: “Buyers have kept in touch while away on holiday and there’s huge appetite to buy, as many people have an eye on locking in a mortgage rate ahead of any further increases in the cost of borrowing.

“With Liz Truss now Prime Minister, the prognosis for the housing market will likely be dictated by the action taken to mitigate the cost of living and soaring energy prices. 

“The announcement of a £100bn energy support package will likely boost buyer sentiment in the short-term.

“If unemployment remains low and inflation is contained, we expect house price growth in the housing market to continue to moderate in the coming months but avoid a cliff-edge moment.”