Only properties priced at £5m-plus are holding their value, says the firm.
It also reports flat sales volumes in Hendon Golders Green Finchley and Hampstead, although blog applicant numbers are up 11% and viewings up 4%. Supply levels have also risen.
Knight Frank says that buyers moving out of London, where prices have reached record highs and where there is no shortage of rich foreign buyers, are key to the country house market.
But Rupert Sweeting, head of Knight Frank’s country department, said: “The real sticking point has been in converting offers into sales. The rate of withdrawal for buyers who have agreed to purchase but who withdraw prior to exchange of contracts has risen sharply within the last year.