© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
March 8, 2013 7:16 pm
It is well documented that international buyers have come to dominate the prime London property market since the start of the recession, and that they discovered the gated private estates of Surrey several decades ago. But according to Savills, overseas buyers are now broadening their horizons.
In fact, between them, buyers from America, Europe, Russia, India, China, the Middle East, South Africa, Hong Kong and Singapore sealed 19 per cent of all UK prime country deals – those worth above £2m – last year. Surrey was still the most popular location but over the past two years 20 per cent of sales were in Oxfordshire and Buckinghamshire, and one in eight were in Hampshire or Kent.
Experts believe that this trend is based primarily on pragmatism – astute investors can hardly have failed to notice that country house prices are attractively depressed, down an average 16 per cent since 2007.
Crispin Holborow, head of country sales at Savills, believes the “major swing” he has witnessed across the Home Counties – the eight or so counties that surround London – and beyond is not yet large enough to kick-start country house price growth. But his hope is it may act as a catalyst. “It will not take much to reach the trigger point where the market starts to move and prices start to rise again,” he says.
Unsurprisingly, international buyers tend to feel most comfortable close to London and its airports. The number of overseas buyers in the prime Home Counties market has risen from 26 per cent in 2010 to 47 per cent last year.
They are also not afraid to spend. For homes worth more than £5m, overseas buyers’ share in the prime country market rose from 17 per cent to 27 per cent.
Paul Finnegan, director of Savills’ Home Counties team, says south Buckinghamshire is becoming an increasing focus of interest. “We have a current inquiry from a Russian buyer who was looking for a house which was steeped in history in the £4m to £5m budget,” he says. “They started looking in Surrey at first but we suggested south Buckinghamshire, which is popular because of its excellent schools. They ended up buying [there] in Gerrards Cross.”
Beaconsfield – recently anointed England’s most expensive market town in a survey by Lloyds Bank – is another growing hotspot with both Russian and Italian buyers who appear unflustered about surrounding themselves with mainly British neighbours. “I think that there are buyers who don’t want to be surrounded by people of their own nationality. They want to live in a traditional, English setting,” says Finnegan.
Another popular option is Kent. Each spring, Jill Mitchenall, a director of Jackson-Stops & Staff based in Sevenoaks, finds herself assisting several house-hunting Russian parents. “It is the pull of Sevenoaks School, where they do the International Baccalaureate,” she explains.
Most of the clients who approach buying agent Katherine Watters, an associate at Garrington, are western European – French, Italian and Belgian – and in their forties and fifties. Since an easy journey to and from London tends to be high on their wish list, she has noticed that the opening of the Hindhead tunnel in 2011, which has eased traffic congestion on the A3, has made locations such as Haslemere, Midhurst, Lickfold and Petworth more readily available.
“The history of the traditional English estates that make up the area, such as Cowdray and Goodwood, also draws in international buyers keen to experience a slice of English life,” says Watters. “There is a huge polo set in that neck of the woods.”
Buyers keen to experience life on an English country estate might consider the Franchise Manor Estate in Burwash, East Sussex: a Grade-II listed Georgian manor with a fishing lake and scope to keep horses. It is on the market with Knight Frank for £11m.
Slightly farther afield, the good looks and high profile of the Cotswolds – an area long popular with wealthy British buyers – has piqued international interest. Buying agent Jonathan Bramwell of The Buying Solution is based in the area and says around one in 10 of his clients are from overseas, mainly Russians, Germans, Swedes and French looking to spend around £2m. Attractions include the schools and universities of Oxford, as well as the opportunity to hunt, shoot and fish.
Buying agent Charlie Wells, director of Prime Purchase, is also finding buyers increasingly open to new locations – so long as the property is within a 90-minute drive of London (unless they have a private jet, in which case proximity to an airfield is key). What is non-negotiable is the type of house they want. “The architecture must be impressive; these buyers like statement homes,” says Wells. Finnegan concurs: “They want privacy and seclusion, which means one to five acres,” he says. “But they don’t want acres and acres to upkeep.” An example of such a property is Kent’s Chiddingstone House, with five bedrooms and almost two acres of gardens. It is currently on the market with Jackson-Stops & Staff for £3.95m. The same agent has another option on the same estate, Blakenhall, a five-bedroom home with a swimming pool complex, on the market for £4.25m.
At the very top of the market, overseas buyers are also dominating sales. Since March 2012, Clive Hopkins, head of the country estate department at Knight Frank, has sold six super-prime estates priced between £10m and £35m. All but one went to overseas buyers.
Most of these buyers will spend little time at their country property. In fact, Hopkins suspects they simply see an English sporting estate as a necessary part of a balanced property portfolio, alongside a London home, a Swiss chalet and a holiday home in the south of France.
Richard Liddiard, head of the farm agency team at Carter Jonas, agrees. “Agricultural land values have more than doubled in the past six years, and there is also inheritance tax relief on farmland,” he says. “I don’t think it is about setting up a home. I think it is seen as a safe, secure place to put your money.”
● Country house prices are down an average 16 per cent since 2007
● In 2012, stamp duty increased to 7 per cent for properties priced £2m+
● Halifax says London and the southeast are the only regions likely to experience house price growth this year
What you can buy for ...
£1m: A four- or five-bedroom country home in a village or hamlet close to Midhurst, West Sussex
£5m:A Grade II*-listed Tudor house, with separate cottage and 23 acres close to Horsham, West Sussex
Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.