"2006: an astonishing year for prime
London property"

- Saul Empson, who runs the London
side of our business, reflects on the year

Over the thirty years I have been involved in the market, there has always been a question at the end of each year as to what house prices will do the following spring when the market emerges from its winter hibernation.

This year the winter passed unnoticed and our assessment was that, with lots of buyers and few perfectly located houses, the market would continue rolling – and it has.  Figures produced by Knight Frank of 17% more buyers with a 50% drop in supply explain why their statistics show that the market went up 11.9% in the first quarter of this year. The following are some examples of buoyant sales this spring.

Berkshire         Guide £2m – Sold £3m
Hampshire       Guide £3.5m - Sold £4.3m
Oxfordshire      Guide £4m – Sold £5.65m
Hertfordshire   Guide £4.5m – Sold £5m
Berkshire         Guide £7m – Sold £8.2m   

No valuation is an exact science and that includes price guides.  In fact we thought that some of the above guides were too low - but more importantly, what does it matter?  With two or three wealthy individuals determined to buy, the price can be bid up 25% or more in a couple of days, as happened with some of the houses mentioned above.

This is not surprising.  Country houses are purchased for a number of reasons, proximity to a particular school being an obvious one, and it is often difficult to find a property that ticks all the boxes.  So when buyers find a property that perfectly suits their requirements they pull out all the stops to purchase it.  And we’re seeing a number of buyers in the country who have sold in London at a much higher price than they had expected, adding further to the upwards price pressure.

It would be wrong to assume that every country house is creating a ‘feeding frenzy’.  If you ask around the market you will find agents talking about properties which sold brilliantly but, with a little pushing they will go on to tell you about others which are sticking.  Nine times out of ten the ‘stickers’ are those that have compromised positions, often road noise – and the gap between the value of the compromised and uncompromised gets wider.

It must be very exciting being a seller whose capital value takes a step upwards every time the estate agent telephones to report an offer.  So how do you make sure that you are in that lucky position when you come to sell?  The key is to take professional advice (preferably from us!) and buy a property in the best and most peaceful position that you can afford.  From our experience in the early nineties, when the market was very different, quality will continue to sell even if there is a major economic downturn.

And what of the future?  The fundamentals don’t appear to have changed: lots of good purchasers, plenty of spending power, and the inevitable shortage of well positioned houses.  So the message for country house owners is enjoy the fact that your property should now be worth more than you realise and dream of what it might be worth if two or three people want to buy it!  

Agricultural Land
In many ways, what is more interesting is how land values have gone up over the last 12 months.  A year ago, a grade 3 agricultural acre (with no planning potential) was worth about £2,750 – it is now £4,000 or more.  There are many variables with land but suffice it to say we are not talking about amenity land or pony paddocks.  Prices continue to be supported by people looking for inheritance tax relief, investment relief or by neighbours wanting to increase their acreages.  Add to this an influx of purchasers from abroad and you can see why the price no longer has relevance to the price of wheat, which incidentally is a little higher at the moment.  But as Mark Twain once said – ‘the thing about land is that they aren’t making any more of it.’!

Jonathan Harington
Director, Haringtons UK Ltd,
June 2007