The report shows that although prime country house prices declined by 5.8% in 2023, representing a sizeable correction after two years of growth, the rate of decline was lower than the 6.1% registered in the previous quarter.

A growing sense that mortgage rates are at, or close to their peak, began to influence market sentiment towards the end of the quarter — a theme that Knight Frank expects to build this year.

Despite uncertainty surrounding high inflation and geopolitical crises in 2023, it was clear that there was a widening gap between buyer and seller expectations.

Knight Frank notes that some sellers were seeking pandemic-era prices whilst buyers, aware stock levels had increased along with the cost of debt, were only willing to progress sales if discounts were negotiable.

The data for Q4 2023 provides some positives.

On a quarterly basis, average prices were down just 0.7%, which was an improvement on the 2.1% fall seen in Q3.

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The latest data shows market appraisals were up 9% compared to the five-year average (excluding 2020) but instructions down 3% over the same period, suggesting some sellers are doing their due diligence, preparing to bring their property to the market.

On the demand side, new prospective buyers were up 3.5% in Q4 compared to the five-year average (excluding 2020) further evidence the market may be gaining traction.

A quieter 2023 for the country market must be viewed in the context of the last three years, as in direct contrast to prime central London, prices are coming off a stellar, and arguably unprecedented, period of growth.

Prime regional prices are 11.4% higher than they were in June 2020, the first full month after the re-opening of the property market due to Covid.

Looking into the future, economic data hints at an improving landscape in 2024.

The mood music shifted markedly in December 2023 as UK inflation slowed faster than anticipated.

There is a window of opportunity for buyers and sellers as the economy settles and before a UK general election is called, predicts Knight Frank.