There are winners and losers in the changing marketplace though manor house properties continue to perform well. Marsya Lennox studies the figures.
The prime country house market, historically immune in times of property slump, is finally feeling the pinch, admit professionals.
The upmarket Knight Frank agency has reported that the wider UK market malaise is now depressing values of country property in the traditionally higher bands.
During the second quarter of the year, prices fell by 3.89 per cent, the biggest drop since the company began collecting data in 1995.
Country cottages are worst hit, seeing prices drop by an average of 5.7 per cent. Farmhouses came next at 4 per cent.
“These homes tend to attract workers in the professions, who are becoming more cautious in the wake of a more pessimistic economic outlook,” said Liam Bailey, Knight Frank’s head of residential research.
Manor houses, however, showed the smallest fall, just 1.9 per cent, reflecting their perennial appeal for buyers after larger, scarce and unique homes. And despite the quarterly drop in values, these properties are still, on average, worth a little more than they were a year ago, if only 0.1 per cent.
“Buyers are more likely to be paying with substantial amounts of equity and are less affected by the turmoil in the money markets,” said Liam.
The three consecutive quarterly falls means that country houses as a group have lost value to the tune of 2.9 per cent on a year-on-year basis – the biggest margin in the history of the company’s index.
Fewer homes are coming to the market in the Midlands and the South as sellers decide to wait until the market improves.
But it’s a little brighter up north, both in Northumberland and Scotland. Values remained static in the north of England and the borders, while rises of just under one per cent were recorded in the Lothians and the West Coast.
North of the border, viewings and instructions were still up in recent months, giving some hope that resilience might continue.
“There is some evidence of realism in the Midlands and the South West, but data on achieved prices in the South East suggests that many buyers have not come to terms with the new climate and are setting their sights too high.
“The best houses in the best locations will still attract intense interest and, in some cases, offers above guide price. For other properties, sensible pricing is essential. This two-tier situation looks set to continue until the economic outlook and mortgage markets stabilise.”
Vendors with properties priced at more than £4 million can relax. These “best in class” homes are still attracting competitive bidding and offers over asking prices.
“The mortgage-driven market, up to £1 million, is undeniably weak,” said Rupert Sweeting, head of Knight Frank’s country department. Farm and land sales are also doing well, with no sign of lessening demand and with rural land prices still increasing dramatically.
Country purchasers, however, are very wary and deals can fall apart easily. Transaction volumes are down and buyers more risk-averse, less prepared to buy without selling their home first.
“If a house is overpriced, in a poor location, or for example close to a major road, a sale is more difficult unless the vendor has opted to price the property sensibly,” said Rupert.
The cheering news, however, is that sales are still happening. “While the number of buyers has decreased, there are also fewer properties coming onto the market. As a result, supply and demand is not quite as unbalanced as the figures suggest.”
*Average manor house values still stand at some £3.13m. Despite a greater fall, the average farmhouse price is £1.29m.
Cottages have taken the greatest hit, prices now averaging £525,000, some 6.5 per cent less than a year ago.