This year’s General Election will have an impact on the recovery of the housing market, but vendors should take advantage of the pre- and post-election lull
Hang onto your hats- it’s going to be a bumpy ride. Despite the recent recovery at the top end of the UK housing market, which, according to Knight Frank, saw prime country-house prices rise by almost 2.3% in the last quarter of 2009, most crystal-ball gazers see more pain than gain in the latter half of the year. ‘Expect the market to weaken in 2010, but don’t expect Armageddon,’ says Liam Bailey of Knight Frank, who believes that although the mainstream UK market is unlikely to see a fully fledged recovery before 2012 at the earliest, the prime-property sector will probably maintain its present steady course, at least until after the General Election. So, with the odds on an early election shortening all the time, the cleverest vendors of 2010 may be those who decide to take advantage of the pre-election lull, and put their houses on the market in the first three months of the year.
To date, two key factors have underpinned the revival of the country-house market: a chronic shortage of houses for sale and sustained demand from cashrich buyers. Philip Harvey of buying agents Property Vision cites the example of one leading Surrey agent who has 456 applicants looking to spend more than £2 million on a house within 15 miles of Guildford, yet he knows of only a handful of such properties that have been valued for marketing in the coming months. ‘Forget discounts from peak 2007 prices: if you want the best of the best in the countryhouse market, and you want it now, you’re going to have to pay up,’ says Mr Harvey, who sees danger in a situation where ‘a few desperate buyers with more money than sense are vastly over-paying and giving vendors the illusion that their houses are worth far more than they actually are’. For the next few months at least, the current two-tier market is likely to continue, with the few really good houses selling quickly and well, and houses that are blighted in some way eventually finding buyers, but only if prices are pitched at sensible levels.
That situation could change dramatically, depending on what skeletons emerge from the Treasury cupboard in the after math of the impending election. One reason for the chronic stock shortage, David Adams of Chesterton Humberts points out, is that, so far in this recession, people have been lulled into a false sense of security by historically low interest rates, and declined to sell at what they perceive to be knockdown prices.
Another important factor has been the devaluation of the pound relative to the Euro and other foreign currencies, which has brought a flood of foreign buyers to London (in 2009, they accounted for 50% of all houses purchased through Chesterton’s London office network). The funds flowing into London have gradually filtered out into the Home Counties and beyond as buyers move out of the capital for more living space with a smaller mortgage- kickstarting the recovery in areas traditionally associated with the London market, such as the Cotswolds, East Anglia and the South-West. And with the 2012 Olympic Games likely to further boost foreign interest in the London market, the knock-on effect will continue to help the recovery in these areas.
On the other hand, the north of England and the Midlands, which are likely to be the worst affected by public-sector unemployment later in the year, will continue to see prices fall. For Mr Adams, the worst-case scenario for the property market as a whole would be a sudden hike in interest rates, for whatever reason, to more than 5%. With the introduction of the 50% tax rate, increases in VAT and fuel costs, above-inflation school fees, and other punitive measures about to take their toll on Middle England, such a move would undoubtedly trigger a wave of forced property sales. This might provide a much-needed increase in supply in the short term, but would inevitably lead to a collapse in house prices across the board.
Moving swiftly back to the present, country-house agents are still basking in the winter sunshine of last year’s laterunning revival, which looks set to spill over into the early months of 2010, especially in key commuter areas. Tommy de Mallet Morgan of Savills in Guildford (01483 796820) has already begun to see a trend for ‘reluctant landlords’ to sell rather than renew tenancy agreements, as they perceive the market to be that much better than a year ago. Vendors who held off selling 18 months ago are also slowly coming back to the market in the hope of launching their properties in January and February, rather than in the more traditional months of March, April or May.
‘Last year, the strongest demand was for houses in the £700,000 to £1.2 million price bracket, but we’ve now started to see the re-emergence of buyers at £2m-plus,’ says Mr de Mallet Morgan. Late January will see the launch onto the market of pretty, four-bedroom Stream House at Haslemere, Surrey, for which Savills quote a guide price of £1.45m. Originally a pair of timber framed cottages at the heart of the Furnace estate, Stream House is now a good-sized family house, set in 1.78 acres of landscaped gardens and surrounded by wooded Surrey countryside.
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Unlike the vast majority of his fellow estate agents, Colin Hughes of Jackson-Stops & Staff in Dorking, Surrey (01306 887560) is expecting to see ‘a tsunami’ of properties coming to the market in his neck of the woods in the early part of 2010. ‘This has come about through pent-up desire on the part of sellers who previously felt unable to justify a move, but who now believe that the worst is over. So far, none of the business models and Excel spreadsheets have taken account of this basic human need to “just get on with it”,’ laughs Mr Hughes. One of his first launches in 2010 will be the 1930s Arts-and-Crafts style Tile House in Deepdene Wood, Dorking-an impressive six-bedroom family house in one of Dorking’s most prestigious private roads, also on offer at a guide price of £1.45m.
Traditionally, downsizers account for a substantial proportion of houses offered for sale at the upper end of the country market-28% of vendors in the £500,000-£750,000 price bracket; 32% between £750,000 and £1m; 36% between £1m and £2m; and 33% from £2m upwards, according to recent research from Savills. But with rising maintenance costs and possible increases in Inheritance Tax now a real concern for this group of vendors, who have been conspicuous by their absence during the recession, the chances are that more of them will decide to test the market early this year.
It’s mainly for health reasons, however, that Mr and Mrs Christopher Maylam have decided to take the plunge and sell charming, Grade II-listed Fosters Farm at Haysden Lane, Tonbridge, Kent, which has been owned by Mrs Maylam’s family since the 1950s. Set in the heart of the Kent countryside, two miles from the picturesque village of Leigh, the pretty timber-framed farmhouse stands in 2-3 acres of gardens and grounds, with further land available by separate negotiation. Chesterton Humberts in Sevenoaks (01732 741212) quote a guide price of £1.45m.
Over in east Kent, Simon Backhouse of Strutt & Parker in Canterbury has noted a ‘Phoenix feeling’ spreading across his area following the official opening of the high-speed Channel Tunnel rail link in mid-December. From now on, commuters can enjoy a swift 40-minute run to St Pancras via Ashford, for an annual layout of £4,536. As a result, not only the historic city of Canterbury, but beautiful if rundown towns such as Folkestone, Deal, Ramsgate and Dover-‘for so long the poor relations of the South-East’- are already showing signs of resurgence.
Strutt & Parker (01227 451123) are currently offering the major part of the splendid, Grade II-listed Manor House at Sholden, two miles from the seaside town of Deal, at a guide price of £1.1m. Set in 1½ acres of impeccably landscaped gardens, the Lutyensstyle manor, originally built in the early 18th century, has some very fine rooms, including a magnificent drawing room, an equally impressive reception hall, a grand master suite, five further bedrooms and three further bathrooms.
With its good commuter links and excellent schools, Hampshire is a natural first stop for families with young children moving out of south-west London. Having enjoyed a surprisingly good year in 2009, with better than- expected autumn sales and plenty of buyers still waiting to buy, Mark Jamieson of Strutt & Parker predicts a busy start to 2010. His firm’s Winchester office (01962 869999) is handling the sale of the historic, 17th-century Old Lodge, listed Grade II, at Titchfield, two miles from Fareham and 10 miles from Southampton, again at the ‘magic’ guide price of £1.45m. Originally built as three cottages, the house was gentrified in the 19th century by the muchtravelled Sir Hugh Stanton RN, who brought back timber and stonework from many countries.
Tucked away out of sight off the village main street, Old Lodge has four main reception rooms, six bedrooms, two bath/shower rooms, a heated swimming pool and 1.62 acres of well-stocked gardens and grounds.
Sam Butler of Cotswold agents Butler Sherborn (01993 822325) advises prospective vendors of country houses in his area not to be put off by the forthcoming election, nor should they wait another 6-12 months in the hope of seeing a significant increase in the value of their property. ‘I’ve seen no evidence of house prices rising in the Cotswolds in the past 18 months. The market has improved in that more transactions have taken place, but prices generally have not increased. In my view, the best time to sell is either early in the New Year with a view to getting a deal done well before the election, or from mid-May onwards, when election fever has calmed down,’ comments Mr Butler.
Having achieved sales of 30 houses worth a total of £115m since May 1, 2009, Atty Beor- Roberts of Knight Frank in Cirencester was surprised to find himself as busy as ever in late December. But he’s seen no great increases in price, except in the case of a few ‘good things’, which sold for some 10% above the guide. He also expects to see more downsizers emerging from the stonework as owners, faced with rising taxes and increased running costs, begin to question the need to keep a large house going, especially if the children have left home.
Vendors who have already taken that crucial decision include the owners of delightful, Grade II*-listed Wickstreet Housenear Painswick, Gloucestershire. A classic Cotswold Stone house set into the hillside with glorious westerly views over the surrounding countryside, it’s been their family home for more than 20 years. Knight Frank (01285 659771) quote a guide price of £2.25m for the house, set in 2.1 acres of formal gardens, paddock and orchard, which has five fine reception rooms, a kitchen/breakfast room, a master suite, six further bedrooms, four further bath/shower rooms, a staff annexe, a coach house and outbuildings.
Over in East Anglia, Jeremy Smallman of Jackson-Stops & Staff in Chelmsford (01245 232713) is at last seeing the return of the ‘London young’, selling four houses priced between £1m and £2m to young London families in the final weeks of 2009. On that basis, he expects to see an early start to the New Year, with buyers spurred on to get things ‘done and dusted’ before the General Election. This month, he’s launching Hoe Street Farmhouse at Roxwell, west of Chelmsford, at a guide price of £1.5m. This historic, five-bedroom, moated house has a bedroom with a wall painting showing the coat of arms of James I, who stayed at the house in 1606, and a converted two-bedroom former granary.
Back in the west of England, Charlie Taylor of Knight Frank in Bath (01225 325999) is also set to get things moving early this month. He’s selling idyllic Penleigh Mill Farm near Westbury, on the Wiltshire- Somerset border, at a guide price of £1.5m. It comprises a picturesque, Grade II-listed, four-bedroom farmhouse, with a four-bedroom cottage, outbuildings and stables, a hard tennis court, a swimming pool and a lake, set in gardens and grounds of about 10 acres.
Worcestershire wizard Andrew Grant (01905 734735) has been quietly picking off a slow but steady stream of country-house buyers who have strayed onto his patch in recent months. Typical of the fine family houses to be found in this unspoilt part of the country is Georgian, Grade II-listed Sodington Hall at Mamble, Worcestershire- an early-19th-century house with 21st-century additions of ‘considerable architectural merit’, according to Mr Grant. He quotes a guide price of £2.35m for the imposing, 8,600sq ft hall, which has five reception rooms, eight bedrooms, five bathrooms, outbuildings and stables, set in 16½ acres of gardens, paddocks and woodland with spectacular views of the Welsh Mountains.
