Despite a slowdown in the UK housing market, sales of property in rural areas continued to surge in July, according to the latest figures from Knight Frank.

The estate agent says frustrated demand has helped drive July’s country market to its strongest period of transactional activity since the end of the stamp duty holiday last September.

Knight Frank says the ratio of new prospective buyers to new instructions is close to the pre-pandemic five-year average of 7.6. Meanwhile, demand has remained strong, in many cases driven by prospective buyers who took rental properties as they continued their search.

It says supply outside of London has improved and the ‘race for space’ continues to a factor for people relocating to more rural areas. It says that with interest rates on an upward trajectory buyers and sellers have moved at pace to lock-in mortgage deals.

As a result the estate agent is now predicting annual house price growth in this country market to finish the year at 7% as demand softens and supply continues to improve.

Knight Frank head of the South West region Mark Proctor says: “There are many prospective buyers who have been in rental for 12 months, having missed out on multiple properties, which means pent-up demand remains huge.”

Buoyed by a strong performance across town and city markets, the number of offers accepted in Knight Frank’s country business in July reached its highest since October 2020. 

This was the period of the initial wave of the escape to the country trend after the UK’s first national lockdown, which lead to buyers seeking more space and greenery, helping usher in a record breaking period for the ‘country’ market. 

The frenetic conditions created by the stamp duty holiday last year saw increasing numbers of sellers holding off from listing their homes due to a lack of purchase options, creating a vicious cycle of low supply. Supply has been building in recent months and with demand proving resilient activity has been high.

While price growth has slowed in the country market, in part due to an improvement in supply, demand remains strong with the number of active buyers in the market unchanged from the same period last year.

“We seem to have returned to more traditional rhythms in the country market in August after two frenetic years, with people able to holiday abroad again. However, I’m optimistic for September as the prospect of what’s ahead is encouraging sellers to act and while there’s been a slight flattening in demand from where we were early this year it is still outstripping supply,” said George Clarendon, head of Knight Frank’s Winchester office.