The Country House market has continued in the first quarter of 2022 much as it left off from the end of 2021: significant demand chasing a limited amount of supply of good houses. At least that has been the perception of the market. The reality being a little different.
Current demand is being joined by a new wave of buyers achieving successful sales in London (following a strong revival of the SW London market), so demand is high. However there has actually been a relatively healthy supply of good country houses coming for sale. Many selling agents have reported a record year of sales through 2021, a record that could be beaten should the supply continue to improve in 2022.
The problem being that the better country houses sell so quickly that the agents don’t have much time (or cause) for openly listing houses online; hence the Rightmove searches seem to yield few results. This is because the best houses are selling prior to an open market phase. Indeed in some instances an openly marketed house can trigger so many phone calls and viewings for the selling agents to deal with, that the logistics of doing so can be overwhelming. If they can achieve the same outcome with 10 to 15 viewings, as they can with 50, the obvious choice for selling is to fast-track the route to the best buyers.
In the late summer of 2021 a Country House came for sale in the Meon Valley in Hampshire with an asking price of £2m with heaps of charm and potential. The selling agent launched the house fully on Rightmove and then fielded 60 viewings from separate buyers. 12 offers later, the house sold for more than 30% above its asking price. In the early part of 2022 another rare gem came to the market in West Sussex for £1.5m and also fielded about 50 viewings. The outcome was a more subdued 12% over asking price. Another house has just been launched more quietly and we predict an outcome of around 5% over the asking price in competition.
We are certainly on the cusp of a shift in market sentiment in the face of headwinds such as inflation, interest rate rises, cost of living crises and wider geopolitical issues. The financial markets are causing a lot of buyers to pause and pushing more sellers to come to the market, in order to catch the tail end of the country house gold rush. The supply / demand imbalance is therefore improving as more caution comes to the broader country house market.
Currently this market shift is pure sentiment as opposed to being a problem of affordability, or for maintaining mortgage repayments for example. In the wealthy and equity rich demographic of country house owners, there won’t be any distressed sales anytime soon. But the sentiment shift is one to keep a close eye on.
Despite this, the drivers for demand and supply will, in our view, remain the same. The need to downsize from a large house and potentially release equity to be repurposed for children or grandchildren, a family separating or joining together, or indeed a deceased estate selling a family asset, will remain. On the demand side, it’s also “life-stage” driven with factors such as upsizing a growing family or moving further from the city for flexible working (regional flexible work-spaces are booming with a surge of “work near home” as opposed to “work from home”) and to a large extent the great schooling the regions offer. Markets might shift, but the children keep growing and the school year still starts in September. Nearly all of the private schools in the country areas that we cover through the southern counties are reporting growing demand and longer waiting lists.
Many selling agents have reported a record year of sales through 2021, a record that could be beaten should the supply continue to improve in 2022.
In a more cautious marketplace, there will be less heat around the bidding on the best houses and we hope buyers can have a healthier negotiation with a seller to keep pricing sensible, but the overall outcome is that buyers will remain competitive until they have bought their new home and sellers won’t sell unless they get a reasonable price for their house.
In summary, increased caution will be a welcome shift to the country house market, but we can’t see prices changing significantly over the course of the next 12 months. If Savills launch a good house at £2.5m within 20 minutes of a good Prep school, and the house is without any major issues, is attractive, perhaps has an annexe, pool or tennis court in a couple of acres of gardens, there will be a queue of buyers ready to grab it, with cash readily available to proceed. When this changes we will let buyers know.
Owner, JM Chase Property Search
Illustration by Simon Ansell