Rural houses are being discounted — some by as much as £3 million
If the walls of Sheering Hall had ears, they would probably be ringing. The grade II listed country house near Harlow in Essex is the long-time home of Steve Harris, the Iron Maiden bassist, and it is on the market for £3.95 million. This, depending on the depth of your pockets, is something of a bargain because the house was put on the market three years ago for £6.75 million.
The 40 per cent price cut on the 11,000 sq ft property might, to an extent, be explained by its interesting decor. This includes a fully equipped pub, the Horse and Cart, and an indoor pool decorated with murals of voluptuous Viking women. The reduction also reflects a more serious matter: the challenges still facing the country house market throughout the land.
Research by Savills shows that country homes worth £2 million or more remain 12.6 per cent below 2007 prices, and fell 5.3 per cent in the year to June. Knight Frank’s most recent prime country house index, published last month, noted that not only has a hotly anticipated post-election bounce failed to materialise but annual price growth has slowed to 2.3 per cent, its lowest level in two years. A year ago annual price rises were running at 5.2 per cent.
Oliver Knight, head of Knight Frank’s residential research department, blames the higher rates of stamp duty that were imposed by the government at the end of last year, which affect all properties worth £1.1 million or more. “There is anecdotal evidence that some buyers are factoring the increased costs into offers,” he says.
Country houses are also, of course, expensive to maintain and run at a time when fuel costs are rising. And another challenge is raised by William Wells, the residential sales director of Mullucks Wells: competition from a rash of new-build country homes with all modern bells and whistles, which can be better value than old houses since their developers have benefitted from tax breaks on materials and labour. “In my opinion, the government has been very unfair to the top end of the market, particularly to listed homes where VAT arrangements which used to benefit such owners have been removed,” he says.
All this does not, however, quite explain why the prime countryside market is struggling. Knight Frank calculates that prime urban markets in cities such as Bath, Oxford and Winchester are now, on average, 2 per cent above their 2007 peak prices, while neighbouring village and rural properties remain 13.2 per cent lower than in 2007. Philip Harvey, managing partner at the Property Vision buying agency, believes that there has been an aspirational shift among the middle classes. Country life has simply become less appealing.
“It seems that far fewer young London families are choosing to relocate to the country,” he says. “Some are buying second homes, but it’s rare to see them moving lock stock as they may have done ten years ago. To a degree, life is simply too full and exciting in London to leave. Additionally, uprooting children from their schools can cause more problems than it’s worth.”
Nick Ferrier, a director of Jackson-Stops & Staff, is based in Midhurst, West Sussex, and believes buyers are prioritising investment potential over lifestyle when househunting, which makes them nervous of moving out of cities. “Buyers are now entering the rural market with more trepidation, an attitude stemming from a lack of economic buoyancy and reduced appetite for risk,” he says. “Whereas we used to see buyers buying country property as part of a lifestyle change, it now seems to be a desire to make a clever investment, which will rise in value, driving buyer behaviour.”
Of course, not all country house markets are equal and there is a predictable regional divide, with homes within an hour or so of London faring considerably better than those farther afield. Houses in the hinterland of Bath, Edinburgh, Winchester and Oxford are also holding up well, according to Philip Selway, the managing partner of The Buying Solution. Jasper Feilding, head of the London country department at Carter Jonas, says that the key hotspot in the north is around Leeds and Harrogate.
Rupert Sweeting, head of Knight Frank’s country department, says Oxfordshire and north Surrey, have seen the strongest prime country price rises on the back of the London ripple. The areas with the biggest bargains are farther afield — East Anglia, parts of the Midlands, the “farther reaches” of East Sussex and Kent, and the West Country.
In Devon, Charles Lawson, a director at Jackson-Stops & Staff, says London buyers previously happy to own property are now more fearful about straying too far from their offices.
Should you be in the market for a bargain country pile, you will need to reverse all the normal property buying rules. Wells operates in Hertfordshire and northwest Essex, and says the local hotspots are along the M11 corridor, with good road links into London. Move farther away from such lines of communication and you will find more country house for your money.
Another way to snag a bargain is to avoid good schools — most country house-buyers are families, for whom education is key. “Areas that have shown more interest than others are those that are within a 20-minute drive of good schooling opportunities,” says Sweeting.
Tom Hudson, a buying agent at Middleton Advisors, says a third factor driving demand for country houses is proximity to a good-looking market town — homes without easy access to an Uppingham or a Keswick will be harder to sell and therefore easier to negotiate on.
Stuart Flint, a partner at Fisher German, suggests seeking bargains in counties on the periphery of the best areas. “For example, Northamptonshire and Warwickshire, just beyond high-performing Oxfordshire,” he says.
Steering clear of the coast also helps. “One can still achieve good value for money in mid-Devon where, in some villages, one can find a property for half the price of a similar home in one of the area’s hotspots,” says Lawson.
You could also take on a doer-upper. “Country houses requiring significant amounts of work have to be sold at a discount, and running costs are now a major factor which can deter buyers from purchasing properties which would be expensive to maintain,” says Harvey.
Feilding adds that the country-house market is at its stickiest above £1 million (particularly if you take on a “compromise property” blighted by road noise), so if you want the most for your money, look for the highest price bracket you can manage.
Buyers who swoop on a beautiful country house at a bargain price might feel rather pleased with themselves — but they are playing a dangerous game. The property market moves in cycles and the last recession has shown that the prime country market is extremely vulnerable in a downturn. A property that seems like a grand bargain today might seem like a very expensive white elephant when you want to move.
“One can pick up a very good country home at a comparatively cheap price in what would be considered a less popular area,” says Lawson. “However, one must remember, that when one does come to sell, the same rules may still apply.”
Originally posted 2015-12-03 12:09:04.