This time last year, the country house market was absorbing the effects of the rise to 12% in stamp duty on property valued above £1.5m. The fall in demand took about nine months to dissipate, but once it had, the market picked up sharply and, towards the end of 2015, we finalised some notable sales. Then George Osborne’s 3% tax on second properties caused a huge surge of activity as people sought to conclude deals before it came into effect on 1st April 2016.
From that point until the EU referendum in June, the market activity slowed as buyers awaited the result. Since the result, country-house market activity is largely returning to normal. Other concerns are uppermost in people’s minds now, such as the start of the academic year, with many prospective buyers looking to complete before then.
At the £5m-plus mark, 50–60% of property purchases are education-driven. Schools such as The Dragon in north Oxford have boosted entire areas, with the best homes nearby demanding similar prices per square foot as London. Many international buyers look to the UK to educate their children and I think we’ll see more of them entering the country-house market post-Brexit. Recent currency changes have meant those buying with both USD and Euros are seeing significant discounts on British property.
Despite recent market volatility some trends remain constants. Good broadband connectivity is extremely important to buyers, as is easy access to work, which is often in London. Excellent transport links are a major selling point, too – a house close to a motorway yet in the heart of the country still commands a premium price, especially if it has been immaculately maintained and tastefully decorated. Incidentally, buyers are often deterred by an excessively contemporary decor, so vendors should think carefully about using that style.
Most alert buyers know it can take two years to renovate a house. Fewer realise that if they turn down a property because it requires too much work, it will often take them the same two years to find another, because it takes much longer to find the right house outside London. This has been exacerbated in the past year due to the shortage of top-quality stock.
Knight Frank offers buyers a way around the shortage of homes on the open market. I’d say 40–45% of the prime houses I deal with are off market, and around 35% of country house deals are done this way. The best house I’ve seen this year never came to the wider market. Selling a home off-market also means vendors can control the time in which they want to complete, as well as offering privacy.
Despite the high demand and lack of suitable stock, buyers all too often delay making a decision over a property they like because they want to see what happens with the market – however, they can lose out by doing this.
We recently exchanged contracts on a house for £7m. Three prospective purchasers viewed it when it was first on the market, then competed over it for six months without committing to purchase. Had one of them bought it when they originally saw it, they would have paid around £1m less.
Some prospective vendors, in turn, are postponing selling, but this may actually be the best time to sell, especially for anyone wishing to move into London. As my colleague, Noel Flint notes, the market there has seen a slowdown over recent months and opportunities are available for well-positioned buyers. They could also benefit from an increase in buyers wanting to leave London and purchase country property.
As for areas in demand, Hampshire is very popular right now, because of its good schools and easy access to London, via the Waterloo line, for commuters. For the same reasons, there has also been renewed interest in the commuter belt from Sevenoaks to Esher. Buckinghamshire and Oxfordshire continue to perform well, and parts of Sussex and especially Hertfordshire remain good value. I am always amazed how, in the country, one change to an area can have such a big impact. For example, the price of property around the Cotswold villages of Great and Little Tew has taken off remarkably, with more people wanting to live there because of the nearby Soho Farmhouse. New clubs, shops and restaurants can be a real indicator and something to keep a keen eye on. The countryside is becoming ever more glamorous.