Country property market review.
The question that has all house-buyers chewing their fingernails is whether ‘now’ is the right time to buy? Are prices just about to soar, or will things get cheaper if they wait? At the beginning of last year there was doom and gloom and it looked as though we would all end up living in caves, but the property market righted itself much quicker than most people anticipated, although without wishing to sound like ‘know alls’ it is exactly what we predicted in our comment of Autumn 2008.
So what has happened in the last twelve months?
London, having gone down 25/30% shot back up, partly on the back of the weakness of the pound and low interest rates and it continues in the same vein. Despite the enormous number of chimney pots, the market is suffering from a lack of supply (a house in Notting Hill has just left the guide of 6.5m far behind and is under offer at over 8m), and the country house market, well that is the main focus of this comment so read on.
The country market took longer to shake off the prevailing gloom after the Lehmans collapse in November 2008. It took a while for people to realise that they still had a job, still wanted to send their children to a certain school and still had the wherewithal to make it happen – made easier with low interest rates. However the recovery was not as extreme as in London where there are many more international buyers to take advantage of the currency. There is always much talk of Russians, but few venture further out than St Georges Hill/Cobham/Wentworth.
Today there is a huge amount of activity in the Home Counties for houses in most ranges – we recently heard about a house in Farnham with a guide of 750,000 which had twelve people trying to buy it. At 1m to 1.5m, the downsizers are competing with upsizers for an ever shrinking supply of the best village houses (3,000-4,000 sq ft in > an acre or more).
Likewise, higher up the market there is strong activity in the 2m-4m sector as London families take the plunge to the country, where your typical terraced house can be swapped for a country house with paddocks, pool and court. In fact a farmhouse in Hampshire with 24 acres came on at 2.25m and after a bidding war was agreed in excess of 2.5m. Another larger farmhouse in the same region with two cottages was agreed 10% below guide only to be gazumped by a guide price offer a week or so later.
It is as though this part of the property market has forgotten that the country is verging on bankruptcy and we are all going to face difficult times ahead. There is no doubt that generally people are going to be poorer in years to come, bonuses are sure to be smaller and everybody is going to pay higher taxes. You would therefore think that the Hampshire farmhouse mentioned above is going to be worth less in a few years time.
We would not bet on it for two reasons. First there are not enough good ‘flawless’ houses to satisfy demand and there never will be and second, with London streets full of houses worth between 2m and 20m, even if they halved in value (which certainly will not happen), it would still mean that any-body moving to the country is adequately armed.
So what does the future hold?
Unfortunately our crystal ball is cloudy but we believe that people will continue to move to the country or within the country for the same reasons – schools, life style and security. There will be perfect houses that will create bidding wars and fancy prices and the ones with problems (such as road noise) will be hard to sell. Which brings us to the untold story of the country market, which lies not in “headline values” going up or down but in the real gap which is widening between the “best and the rest”. In 2007 that might have been 10% but in 2010 it is 25%+ and still rising. How do you define the best? Certainly the following five ingredients are essential:
- Private edge of village setting for some or rural seclusion for others, in beautiful countryside
- Peaceful (no “planes, trains or automobiles” not easy any more in the home counties)
- Head turning architecture (whether period or new)
- Good outbuildings for home office, staff or the “toy” collection
- Within 1-2 hours of London with good access to a fast train – not necessarily commutable
So having made the decision to buy a country house, the question is, do you then put it off in the hope that the same house will be cheaper ‘tomorrow’? If the decision has been made to get on with it, you should get on with it. Months have a nasty habit of turning into years and before you know it, all the reasons for moving will have disappeared.
Russell Hill, Haringtons UK, Spring 2010