The architecture and design of the best homes across the land reflect their age and location. Location is also key when it comes to property values, and age plays a part, but the price band of the home is becoming increasingly influential in determining price trends.
Macro-economic and political factors also sway the market as a whole. The appointment of a new Prime Minister and Cabinet earlier in the summer, for example, following political uncertainty in the wake of the vote by the UK to leave the European Union, was greeted with positivity and viewed as preferential to months of campaigning by Conservative candidates.
Transactions in the prime country market have continued apace since Brexit, with evidence of price renegotiations in some instances. The relative value of sterling has also been a boon for buyers using dollars or other overseas currencies to purchase a home, providing an effective discount on the price of bricks and mortar. The relative value of the prime country market compared to prime London has also resulted in a ripple effect as buyers move from the capital to the country, boosting demand. This trend is expected to continue.
However, the referendum and its impact on the prime property market cannot be viewed in isolation. Other policy decisions, such as four major changes to Stamp Duty Land Tax levied on the most valuable homes over the past five years, have also affected the market. There was a notable surge of activity in March this year, as buyers pushed through deals before 1st April – the date of the most recent levy, an extra 3% duty on additional homes – came into effect. The market has absorbed such changes in the past, but it is usually a process that takes place by degrees, over a matter of months.
But amid these developments, what has been happening to pricing in the market? Just as there is no one perfect country home, there is no one figure that can fully encapsulate the prime country-homes market. Our Prime Country House Index, which has been running for more than two decades and is compiled by analysing figures from our surveyors in 31 residential offices across the UK, is one of the best indicators of the direction of travel in the market. It shows price growth of 1.3%.
Drilling down below the headline figures, several distinct trends emerge. Perhaps the most notable of these in recent years has been the outperformance of prime properties closer to urban locations compared to those in more rural settings. Prices in Cheltenham, for example, rose by 8.6% in the year to the end of June (reflecting the market before the EU referendum vote), while prices in Bath are up by 4.8% over the same period. Prime price growth in Edinburgh is also outstripping that in the wider Scottish market.
Access to schools and transport hubs are among the attractions of more urban markets, especially those within commuting distance of London. While the price differential between London and country homes has encouraged more people to make a move from the capital, in many cases, one or more members of the household will still need to travel back in for work on a regular basis.
However, there are some trends that unite many local markets – and one of these is a continued lack of stock. The relative decline in vendors putting their homes on the market in recent years, particularly in more urban locations, has underpinned pricing in some respects. This was especially noticeable in the months preceding the referendum, when buyers as well as vendors chose to ‘wait and see’ rather than enter the fray of the market.
There is also a distinct difference in performance across price brackets. Again, some of this can be attributed to the market having adjusted to higher stamp-duty charges. In the year to June, the price of prime country properties worth more than £5m fell by 7.9%, while those for properties worth £1m–2m rose by 1.4%, and those worth £2–3m by 1.7%.
It is worth adding that the one thing hard data struggles to capture is the lifestyle buyers are choosing when they invest in a prime country property: it may be a tangible asset, but it’s first and foremost a home.