UK’s once-hot country home market faces a rough post-Covid reality
BRITAIN’S high-end country home market, which enjoyed a red-hot pandemic boom, is fast becoming part of the nation’s property slump.
A home in luxury country destinations is less likely to sell above its asking price than a home in London’s most affluent districts for the first time since 2015, according to data from broker Hamptons International. A prime London home is also more likely to go under offer within two weeks of coming onto the market than a countryside property for the first time in eight years.
Prices of prime country properties–those in the top 5 per cent of the market–are forecast to end the year down 7 per cent, according to broker Knight Frank. That’s a stark contrast from October 2022, when the number of homes sold outside of London that were priced £5 million (S$8.42 million) and above hit a 15-year-high.
“Some sellers are still basing their asking price on the increased buyer demand that the country home market has experienced during the pandemic, but the majority of buyers are no longer willing to agree to a sale at that level,” says Nigel Bishop, founder of Recoco Property Search, a buying agency targeted at rich clients.
Bishop said a client recently agreed to buy a manor house in Devon at an 11 per cent discount off the £6 million asking price. Another client this year negotiated a 12 per cent lower price than the sellers initially wanted for a home converted from a barn in Cornwall.
Compare that with 2021, when about a third of country homes were selling above their asking price as Britons fled cities for more living space during the pandemic. Homes took roughly half the number of days to sell in 2021 compared with the first 11 months of this year.
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“There was a great exodus from London and it all got quite silly. We had seven buyers for every property or something ridiculous,” says Nick Loweth, regional director at the Country House Department, who says the flexible work environment many companies were offering was a part of what made the market so hot. “Everyone assumed that we’d all be working from home forever. And the pendulum has swung back, not entirely, but people are needing to be in the office more now.”
Loweth says that it’s not entirely a seller’s market anymore, but not all sellers have gotten the memo. He says many of them are still pricing homes like it’s the heyday of 2021. To make a sale, they need to realise that the market is back to more normal conditions.
Prime country properties took an average of 79 days to sell after going on the market in the year through November, compared with an average of 55 days across Great Britain, according to Hamptons.
“The country market has cooled quicker than elsewhere because it was running so hot post-Covid,” says Aneisha Beveridge, head of research at Hamptons. “Country homes had a lot more froth given that they saw some of the strongest price growth in the race for space.”
Rising borrowing costs, economic uncertainty and the worst cost-of-living crisis in a generation have driven a slowdown in the UK property sector this year. Luxury home buyers typically don’t borrow as much for purchases, but demand is still being hit by negative sentiment and political uncertainty in advance of a general election that could come as soon as next year. Agents say purchases typically slow down around elections.
Some 52 per cent of global prime homebuyers are now paying in cash, up from 46 per cent six months ago, according to a report published last week by Knight Frank.
Still, pricier deals are holding up better than less expensive ones, and not all buyers can secure deals below asking prices. Lindsay Cuthill, founder of estate agency Blue Book, says homes in sought-after tranquil villages with easy transport links to London are still selling, albeit at a slower pace than they were last year.
“People do still love the Cotswolds,” says Cuthill, adding that at the country market generally has a shortage of good stock, so trophy homes retain their value.
Jonathan Bramwell, head of the Buying Solution, who primarily deals with homes priced £2 million and above, says that there was a period of time where if the wealthy didn’t already own a country house, they wanted to purchase one, but that things have calmed down. “Buyers are able to secure discounts now.” BLOOMBERG
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