Rural property, long popular with those seeking country retreats, is now vulnerable to the downturn afflicting almost all sectors of the market
Britain's mid-range country homes market has suffered price falls over the past 12 months. Now the top end of the country house market, which had stayed buoyant over that period, is looking vulnerable to a downturn.
According to estate agency Knight Frank, rural property prices dropped 4 per cent during the third quarter the year, the biggest fall since the company started its index in 1995. This means overall values for country houses slid 7.9 per cent over the 12 months to the end of August, the agency says.
Smaller residences, such as cottages, suffered the biggest falls in values, while manor houses fared less badly, it reveals. But the most expensive homes, those worth over GBP5million (HK$68 million), increased in value slightly, the agency says.
Demand for farmhouses and cottages was badly hit by the evaporation of mortgage credit and a slump in demand for holiday homes, the agency says. The turmoil in financial markets is expected to eventually feed through to the top of the market and prices for #5-million homes are likely to start falling, it adds.
'We could be looking at the first year-on-year fall for these 'trophy' properties by the new year,' says Andrew Shirley, head of rural land research at Knight Frank.
Southeast England has traditionally been the favourite hunting ground of financiers and stockbrokers looking for weekend retreats, but some may need to sell their homes because of the worsening credit crisis. Tom Hudson, managing director of countryside buying agent Middleton Advisors, says: 'I expect that the turmoil will take a percentage out of the number of potential buyers around, and we may begin to see forced sales where people in the banking sectors need to release equity.'
The types of property available in the GBP5-million-plus range can vary widely. In southeast England, Charters, the former country estate of the Duke and Duchess of Windsor in the 1940s, has been converted into apartments priced from GBP5.5 million. In addition to the GradeII listed art deco mansion, two new buildings have been built in the 20-acre grounds to provide space for 34 apartments.
Although it is located in rural Berkshire, the development includes many features normally associated with urban projects, including underground parking, a 24-hour concierge service and hi-tech gadgetry, such as plasma mirrors that turn into televisions at the flick of a switch.
At the more traditional end of the spectrum there is Dunira Estate in Perthshire, Scotland. Here an owner can go deer stalking and salmon fishing on their 3,261 acres of land. In addition to the 10-bedroom main house, the GBP5.5-million estate includes cottages, farmland and forest.