Country House Market
Prime country house prices dropped by 5.8% in 2023 according to Knight Frank and 4.8% according to Savills.
However, this does not tell the whole story. Best in class stock (which we always aim to secure for our clients) proved most resilient, hardly feeling any squeeze at all. The market below £2 million was harder hit than property priced above £5 million. This in large part is a reflection that buyers below £2 million are far more likely to need a mortgage, whereas above £5 million it is rarer for buyers to need to take debt (although many chose to do so when interest rates were lower). As a result, sentiment amongst these cash rich buyers tends to be slightly different.
For us, 2023 might be remembered as the year of the price reduction. Although the overwhelming majority of properties we acquire are secured off-market, we bought significantly more than usual from the open market in the last year. This was mostly because of initial ambitious pricing by sellers (or their agents), with houses failing to sell privately then languishing unsold on the open market until expectations were realigned. The key to success with these sellers was knowing the right moment to strike.
For the coming year we anticipate prime country prices will remain pretty static (although Savills predict a 1.5% drop). As inflation and mortgage rates have both come down there is certainly some early evidence of greater confidence in the market. Many agents are reporting a marked increase in buyer registrations in the first few weeks of 2024.
We do expect the selling period to be short and intense though, with most deals being agreed by the end of June. Summer holidays are traditionally quiet and the Autumn market will inevitably be a damp squib as focus likely turns to an impending election. Despite the likelihood of a Labour government there is much more pragmatism amongst our client base about the impact on them, by comparison to the sheer terror many felt when threatened with a Corbyn government in 2019.
FARMS & ESTATES
In the farms and estates market there was greater supply last year, but demand still outstripped this helping agricultural values to creep up by about 7% overall.
We anticipate values will continue to rise, buoyed by a combination of non-farming buyers and rollover money. Good residential and sporting estates remain much-coveted and we were fortunate to complete on the purchase of an outstanding estate in Oxfordshire, acquired privately for a client towards the end of the year.
LONDON
In Prime Central London (PCL) £10+ million sales achieved an eight year high of 175 transactions in the year to November.
This contrasted with the rest of the PCL market where volumes decreased significantly, according to Knight Frank. Notwithstanding prices have remained virtually static with best in class performing especially well. Heaton & Partners achieved a record year in 2023 with an influx of international money as London is perceived as a safe-haven for investors.
Labour have mooted the abolition of the non-dom regime and even higher stamp duty rates for international buyers. It remains to be seen how this might impact the market in the years ahead given how significant international buyers are on the London market. For the time being expect to see more of the same.
