The first currents of market electricity

Prime country property has lagged behind London, but will the economic recovery give buyers the confidence to exploit the value gap?

31 March 2014, Words by Lucian Cook

 

As unlikely as it may appear in a previous life, before I became a researcher I worked as a land agent.

I specialised in tax valuation. That often involved valuing random legal interests in large country houses. Accordingly, I had the great pleasure of working with two of our more colourful country house agents, one of whom was always “electric” or “on fire” and another who more often than not was involved in a chain of correspondence with either the Prime Minister or the Archbishop of Canterbury.

Both had a genuine love of prime country property and looked to London as the lead to see what would happen next in their markets. Since 2008 they would have become impatient at being kept waiting for the recovery, that has been so strong in the capital but which has been stubbornly reluctant to work its way into the regions.

Yet, as we publish our first spotlight on prime regional property, there is a feeling that the recovery is becoming more firmly entrenched in the prime regional markets, as the economic recovery gives buyers the confidence to exploit the value gap between London and the country.

However, there have been some distinct trends in the past five or so years that are likely to shape the prime regional market recovery.

Firstly, in light of the changes to stamp duty, a clear threshold in the market at £2m has arisen, a reflection of how tax policy can impact on buyers’ psychology as much as their budgets. It is therefore no surprise that our survey of prime regional buyers were distinctly opposed to a mansion tax. You could argue this is simply because turkeys don’t vote for Christmas. However, the fact 29% in the £500,000 to £1m price bracket are actively opposed to it suggests it is viewed with suspicion by those who aspire to own more valuable prime property, even if it is currently out of their financial reach.

Rise of urban prime

With this in mind, the political rhetoric surrounding this contentious issue could easily interrupt the ripple effect from prime London, even if, on the flip side, its imposition could draw money out of London to less expensive prime markets.

Secondly, we have seen a continued rise of prime urban markets in the likes of Tunbridge Wells, Beaconsfield, Oxford, Cambridge, Bath, Edinburgh and York, that has not been matched by properties in prime rural locations. This left us questioning whether the golden age of the Country House had passed, to be confined to the sugar-coated nostalgia of Downton Abbey.

Our survey results indicate such thoughts are not the case. The traditional manor house is still the property that would most appeal to our buyers’ friends, though the reality is that, with the £2m price threshold, the farmhouse is more attainable for most as prospects get better.

Similarly, there is still demand for renovation projects – more it would seem than for new builds, even if London finishes are becoming increasingly in vogue in the shires.

So there is still reason to believe that were my former colleagues still plying their trade, the former would have reason to feel the first currents of market electricity and the latter would be praising the Archbishop of Canterbury for having a word with the man upstairs to kick start a recovery in the prime regional markets.

 
 

Receive the latest research

Key Contacts

Lucian Cook

Lucian Cook

Director
Residential Research

Savills Margaret Street

+44 (0) 20 7016 3837