Click
here to see how the property market in Aberdeen is doing
Allison and Andrew Johnson have just slashed £55,000 off the asking price of
their Queen Anne country house in Staffordshire. It is a move that would
have been laughable when the couple put Lea Knowle Farm up for sale in
February. Stock levels were low, buyers were queuing up – and prices of
prime property were soaring, from Chelsea to Cheshire via Chelmsford.
The market for country houses – alongside that in prime central London – has
been one of the most buoyant sectors of the British housing market in the
past few years. Now, inevitably perhaps, it seems to be falling victim to
the loss of confidence caused by the global credit crunch.
Prices across the country are flat, and in some places, such as the southeast,
southwest and East Anglia, they are even falling back. According to the
estate agency Savills, prices of “prime” country houses (those valued at £1m
or more) rose by 1.4% between July and September, just half the rate of
growth in the preceding quarter (2.8%) and way below the 3.5% seen in the
final quarter of 2006.
“It reflects a market taking stock of the economic climate,” says Lucian Cook,
head of residential research at Savills. “The volatile financial markets
have precipitated a cooling of the hitherto exceptional performance in prime
housing markets.”
The fate of the Johnsons, and the fluctuating value of their Grade II-listed
five-bedroom farmhouse in Bishops Offley mirrors that of the national
housing market. Their decision to drop the price from £750,000 to £695,000
coincided with the near collapse of Northern Rock in the wake of the chaos
in the American sub-prime mortgage market, which led to a slowdown in the UK
housing market. There has been a resurgence of viewings since the price cut
in early September, but they have had no offers.
“The problem is that interested buyers have to sell their properties before
they can proceed,” says Andrew, 45, director of a computer software firm.
“Chains are slowing, so we’re not out of the woods yet.”
Break it down regionally and the picture for the third quarter that emerges
from those Savills figures is gloomy. Prices of country piles in the home
counties saw growth of 1.1%, houses in the west and southwest only 0.84%.
The best-performing regions included the east (2.24%) and Scotland and the
north (both up 2.4%).
Look more closely and some of the most popular country-house locations
recorded marked falls. According to Primelocation.com, a property-search
website, prices fell in August and September, for the first time since March
2006.
“Record numbers of country properties have been coming onto the market, with
volumes up 3.8% on last month and 32.6% annually,” says Ian Springett, chief
executive of Primelocation. “This has suppressed the potential for price
growth.” Prices fell by 1.7% in Hertfordshire, 2.8% in Surrey and 4.4% in
Buckinghamshire.
Such a turnaround in the market has led Bidwells, a specialist rural agency in
the east of England, to slash its price-growth forecast for 2007 by half, to
4%. It says prices of rural properties in Suffolk, Essex and Cambridgeshire
have all dropped by as much as 3.9% since the summer.
“It’s as if the entire year’s market activity was crammed into the first six
months,” says Chris Carey, residential managing partner of Bidwells’
Cambridge office. “We saw prices rising by 10% to 20% on some properties.
Now they are static, with a rough balance between supply and demand. We
reckon we won’t see any rises for the rest of this year, and there will be
far fewer transactions.”
All of which is not good news for the Johnsons, or indeed the owners of
Whitway House, in Berkshire. The Hietts have just cut £150,000 from their
asking price. Like many owners of country homes, they were hoping to catch
the attention of a City buyer who, frustrated by the lack of property on
show early in the year, would come bounding to their door,
multimillion-pound bonus in hand.
Their dream buyer has failed to materialise, so the couple’s Grade II-listed
five-bedroom house, near Newbury (and rather too near the A34), which went
on sale in July for £1.25m, is now priced at a more modest £1.1m.
“City bonuses are anticipated to be lower than the payouts of the past two
years,” Springett explains. “With City money a key component of demand, we
expect to see this affect the market over the next few months.”
The autumn market has not taken off, and forecasters predict a bonus shortfall
of between £2 billion and £7 billion this winter. Given that about half the
City’s annual windfall goes into property, there is a chill wind blowing in
the shires.
Lea Knowle Farm is for sale for £695,000 with Savills; 01952 239500, www.savills.co.uk.
Whitway House is for sale for £1.1m with Knight Frank; 01488 682726, www.knightfrank.co.uk
Why does everyone complain when country properties are "only " rising by 1.1% per quarter? Isn't that what it should be?
We have got too greedy expecting a regular annual 20-25% per year. It couldn't be sustained forever and the prices need to DROP considerably to avoid the sort of problem we are noe in. Artificially propping them up will help no-one in the long term......we will just end up with an even larger problem.
pedro tam, London, U.K.