When Alistair and Olivia Markham moved from west London to Cambridgeshire last
August, they thought it would be easy to find a suitable property to buy.
They had a budget of up to £2m and a list of what they thought were
reasonable requirements – five bedrooms, 3,500 sq ft of living space and at
least half an acre if in town, slightly more in a village. They had chosen
to rent in Cambridge while they were looking, so they would be ready to
pounce. They were also realistic about the timescale, expecting to find
something within a year.
Seven months later, the Markhams, who have three young children, have revised
their expectations. Despite looking at 15 houses, they have yet to find a
property on which to put in an offer. “I am quite fussy, but I recognise
that we will have to compromise,” says Alistair, 39, an investment banker
who commutes daily to London. “I’m not as certain we’ll find something
within a year. I’d like to be in a place we can call home, but we are
prepared to rent for another 12 months if need be.”
One of the properties the Markhams considered – but didn’t think worth looking
at – was the Grove, a six-bed period house a quarter of a mile from the city
centre. The property (which was sold with an adjoining building plot and 2È
acres of land) was divided into three lots. It attracted 100 viewings the
weekend it went on the market, had 29 offers and eventually sold for close
to £3m – almost £1m more than the asking price.
Don’t be misled by headlines warning of financial meltdown and collapsing
house prices – although certain parts of the market are undoubtedly
suffering as the credit crunch bites, other sectors, especially £1m+ country
houses, are proving extraordinarily resilient.
Exclusive research for The Sunday Times by the estate agency Savills shows
that Cambridgeshire is one of the toughest places in which to buy such a
house – with more than 50 applicants chasing each property, compared with a
national average of between 10 and 20. “There is a real undersupply of stock
above £1m in Cambridgeshire,” says Lucian Cook, head of research at the
agency. “Possibly this is because of the dominance of Cambridge itself – the
prime market is concentrated in the town and some of the closest villages.”
Chris Carey, managing partner of residential sales at the Cambridgeshire
office of the estate agency Bidwells, says it is all down to the
attractiveness of the area. “We’ve got world-leading companies now based in
Cambridge. Couple that with the fact that schooling is hugely in demand, and
that it’s an hour from London and half an hour from Stansted, and there are
a lot of people who want to move here,” he says.
“There’s a shortage of stock – the university and colleges still own quite
large parts of the city, so the volume of properties is relatively thin.
Prices are not unlike those in some of the prime areas of London – asking
prices are being exceeded by 20% and sometimes 30%.” Carey recently put a
property on the market in Cambridge at £1.1m – it had 20 viewings within
three weeks, attracted three cash bids and went for 10% more than the guide
price.
The market in Wiltshire – second on the Savills list, with 47 applicants per
property – is almost as tight. The county’s appeal is similar to that of
Cambridgeshire – near enough to London to commute at least a few days a
week, attractive countryside, good schooling.
“We’ve had to turn down a couple of clients recently,” says Adrian Wright,
head of Wright Property Search, an agency that covers Wiltshire,
Gloucester-shire and Hampshire. “We could have more clients if we wanted.
They’re all desperate to buy – but there’s nothing around.” It’s a similar
story in Oxfordshire (with 22 applicants per £1m property) and Dorset (with
18).
Tom Ainsley-Jones, his wife, Sarah, and their two children, Lily, 4, and
Olivia, 2, had planned to move near to Henley-on-Thames, in Oxfordshire, and
started looking for a house six months ago, even enrolling their elder
daughter in a local prep school. The couple, who have £2m to spend, have
failed to find anything suitable and, last week, decided to take their home
in Wandsworth, for sale for £2.5m, off the market.
“There just aren’t that many houses to look at,” says Tom, 41, a property
developer. “We probably looked at 10 – we got outbid on one or two and the
rest weren’t quite right. We thought we’d sell our house in London and find
a house in the sticks quite easily, but it hasn’t proved to be like that.
We’re a bit downhearted about the whole thing.” Even in Surrey, which has a
modest five applicants for each property – a reflection, perhaps, of the
high numbers of houses in this price bracket – it can be difficult to find a
suitable home. Susie and Andy Clark have just sold their fourbed house in
Long Ditton, near Surbiton, for £700,000. They have up to £1.5m to spend and
want a five-bed house with space for them, their two children, Poppy, 8, and
Theo, 2, and Susie’s father, 88. They have been unable to find anything,
however, and last week moved into rented accommodation.
“The problem is, there isn’t much stock around,” says Susie, 40. “I think I’ve
looked at more than 70 properties. It is difficult, because I’m looking for
something specific, but at the same time I keep getting shown properties
that are totally unsuitable – last Friday, I was shown a tiny fourbed
cottage that was way outside my price range.”
So why, when we are being told that prices are dropping and buyers dwindling,
is there such a queue for country houses? “Across the board, in a
generalised way, instructions in almost any county are few and far between,”
says Philip Selway, a partner in the country division of the
property-finders The Buying Solution. “There are fewer homes now than there
were last year, and fewer then than there were the year before.”
Rupert Sweeting, head of Knight Frank’s country department agrees. “There are
lots of buyers, but there are fewer properties for them to view,” he says.
“Last year, you might have had 20 houses on the market, with 50 people round
them. Now you might have 10 on the market, but 50 people still looking.”
Not all sellers are going straight to an estate agent, either. “What we’re
finding is that an awful lot of people are not committing to selling and
instructing an agent – so we are getting more private invitations to come
and have a look round,” says Craig Jordan, an executive at the search agency
Property Vision. “They’re nervous of the market dipping and want to see if
that’s actually happening – they’ve not really decided whether they’re going
to move yet.”
Added to that is the fact that Easter is early this year, delaying the start
of the spring marketing season. “You don’t want to start your campaign, then
hit a holiday period and have to regalvanise it later,” says Dawn Carritt, a
director at Jackson-Stops & Staff.
With all the negative headlines about the market, buyers are also becoming
more demanding. “Their budgets have not decreased, but the threshold of what
they are looking for has increased, and they’re not inclined to compromise,”
Jordan says. “Last year, if it was in the right village, they would have had
a bid. At the moment, it’s got to be the right village, the right size and
the right address as well. It needs to be far more than just location,
location, location.”
So, what does the future hold for the country-house market? For Cook, the
decisive factor is the shortage of suitable stock: “Theoretically, in a
slower market, there should be less competition among buyers, but often, in
these periods, downsizers, who have the ability to free up housing, will
postpone their plans to move. While it becomes easier to find a property, it
is not significantly so.”
Cook predicts a gradual increase in the level of property coming on sale in
the spring, but expects the market to remain tight. So, if you are in
possession of more than £1m, and want to be in possession of a house in the
country, be prepared to fight for it.
Swings and roundabouts– how the market is doing
While househunters with £1m or more to spend are battling it out for their
dream rectory, the rest of the nation is preparing to batten down the
hatches as the slowdown becomes more entrenched.
The Easter weekend is traditionally the time when the housing market gets a
spring in its step, but renewed turmoil in the financial markets, the
collapse, last weekend, of Bear Stearns and a growing global sense of unease
mean the outlook for the British market is getting gloomier by the day.
Morgan Stanley predicts that house prices will fall by 20% in real terms in
the next two years, and Ed Stansfield, property economist at longtime bears
Capital Economics, predicts declines of 10% by the end of the year. “The
only certainty isthat the market is going to get worsebefore it gets
better,” he says.
To add to the gloom, Savills last week announced that it expected prices in
prime central London to fall by 4% this year. As recently as last September,
it was predicting a 5% rise. Lucian Cook, director of Savills residential
research department, says that worst affected will be flats in Kensington,
Chelsea and Notting Hill in the £1m-£2m bracket. “When we did our forecast,
we were looking at the credit crunch having a minimal impact,” Cook says.
“Now we believe it will have a deeper, longer impact, which will inevitably
affect the London market for City buyers.”
Elsewhere in the country, it is properties below £1m that look set to be
hardest hit. “The weakest regions are the northeast, the East Midlands and
East Anglia,” says David Stubbs, senior economist at the Royal Institution
of Chartered Surveyors (Rics). “Stock is rising, which is putting pressure
on prices in the medium term. The majority of the market is vulnerable. So
much depends on mortgage brokers.” The latest Rics survey shows stock piling
up, with the average level of unsold homes per office at the highest level
since October 1998.
“Any property that isn’t perfect will suffer,” warns Richard Donnell, director
of research for the property analyst Hometrack. “Affordable, mid-priced,
bread-and-butter houses will beall right, but anything else – especially
new-build city-centre flats – will really struggle to sell.
“Just as everyone is repricing risk in the financial markets, less confident,
more conservative buyers are reassessing what they are prepared to pay.”
It normally takes an average 10 viewings to sell a property, but Miles
Shipside, commercial director of Rightmove, has heard of sales taking
between 20 and 40 viewings. “Outside London and the southeast, the market is
at a standstill,” he says. “There is a large gap between sellers’
expectation and buyers’ ability to pay. The market needs openly to accept a
10% reduction in house prices.”
Helen Davies
