For more than 100 years, the advertisement pages of Country Life have reflected the state of health of Britain?s elite country-property market. The latest findings of the Country Life Elite Property Index (CLEPI), which tracks the progress of every property advertised in the magazine, reveals that, in the six-month period from January to June 2005, the volume of property advertising carried in the magazine fell by 6% in comparison with the same period of 2004 (Fig 2). The greatest variances relate to the months of April and May 2005?those immediately before and after the May 4 general election?but this great event, in itself, by no means tells the whole story.

The City of London is the engine which drives the country-house market in Britain??it always has, always will?. And the recent Government report, confirming that the Square Mile now generates nearly one-third of the country?s total wealth, appears to support that view. As one estate agent puts it: ?Buyers in this market do not care what the Halifax does, but they do care what the stock market is doing, and what George Bush and Tony Blair are doing.?

Confidence in the global economy is what drives big earners in the City to spend big bucks in the countryside. And with confidence lacking in the early part of this year, the markets for highly priced ?trophy? houses and second homes both took a tumble. Nobody wants to sell in a falling market, unless they absolutely have to, and, as can be seen in an analysis of properties for sale by price brackets (Fig 3), relatively few houses priced at more than £5m, or less than £500,000, were offered for sale.

Of all the blue-chip counties in England affected by the slow down at the top of the elite property market, Surrey (the best-performing county in both 2003 and 2004) was one of the worst hit, with an unprecedented 38% drop in the volume of properties offered for sale between January and June 2005 (Fig 5). The absence of big spenders was most keenly felt in the gilded enclaves of Esher and Cobham where, according to Tim Garbett of Knight Frank, only a handful sold for more than £4m in the first four months of this year. One of these was St George?s Hill House, in St George?s Hill, Esher (Fig 4), for which Knight Frank found a buyer at ?.25m.

The ?footballer effect? may have had something do with it, of course, but generally speaking, ?north Surrey was perceived to be overrated and overpriced,? says Mr Garbett. Nevertheless, he found buyers for 15 houses, priced at more than £3m, during the period in question.

Three to four million pounds was the ceiling in the rest of Surrey too, with prices at the top end of the market falling ?by 10% to 15%?, says John Denney of Hamptons International in Guildford. But, it was not all bad news, for a revival of the market for family houses in London meant that people who were looking to move to the country were at last free to do so. According to the Office for National Statistics, more than 100,000 families move from London to the country each year with Surrey top of most would-be commuters? lists.

The slow revival at the top end of the Surrey country-house market began with the sale by Savills of lovely Chilworth Manor (Fig 6) with 45 acres, three miles from Guildford. Launched on the market in mid-April, it sparked a bidding war between several buyers and eventually sold for almost double the guide price. Thereafter, the supply of good country houses, especially those in the £1m to £2m price bracket, rose steadily, gathering pace from mid-May onwards, with the number of houses for sale in June 2005 narrowly overtaking the volumes offered in June 2004. As a result, the average price of a country house for sale in Surrey increased to £2.34m for the six-month period, as against £2.1m for the equivalent period last year (Fig 7).

The Cotswold counties of Oxfordshire and Gloucestershire have undoubtedly been this year?s star performers in the family market, both in terms of the numbers of properties available and the proportion sold. Cotswold agent Sam Butler sums up this region?s perennial appeal: ?In a nutshell, what makes the Cotswolds stand out from surrounding counties is, first, its instantly recognisable architecture; secondly, its fabulous undulating countryside?quintessential England at its best; thirdly, its plentiful supply of excellent private and state schools; and finally, its superb location, in terms of commuter access to London and Heathrow.?

One model Cotswold property that encapsulates all these attributes is the exquisite Wychwood Manor, set in 51 acres of land, near Charlbury, Oxfordshire (Fig 9). It came on the market through Savills in mid-April at a guide price of £2.75m and sold within a matter of weeks.

Despite a sharp fall in the overall number of houses for sale in the West Country in the first part of the year? Wiltshire (?42%) and Cornwall (?54%) were major sufferers, with Dorset (+16%) the only county in England to register an increase in numbers?the country-house market in the area is still fundamentally as strong as ever. Like so many of us, it just took a little longer to get going this year.

Interestingly, the Salisbury office of Strutt & Parker reported ?a flying start to the year?: 12 prime country properties were offered for sale in Country Life at prices ranging from ?85,000 to ?m and all except two were sold, both of these withdrawn by the vendors. One of the most appealing, Rowberry House, at Donhead St Andrew, Wiltshire (Fig 8), provoked fierce competition among three buyers?one local and two from London ? ending in a sale (to the local buyer) at well above the ?.35m asking price.

Given the national slow down in house sales this year (a fall of 28%, on average, across England and Wales, according to the latest Land Registry figures), it was inevitable that even Devon, regularly voted England?s most popular county by Country Life readers, would eventually feel the pinch. The number of Devonshire country properties advertised in Country Life fell by 22% between January and June 2005, compared with the same period of last year (Fig 5). But, with the emphasis on quality rather than quantity, the average price broke through the £1m barrier for the first time, rising from £949,000 in the first six months of 2004 to £1.1m this year.

In Devon, as elsewhere in the West Country, the cream came to the top and a high proportion of the houses offered sold well, if not that quickly. Of 109 houses for sale in Devon between January and June this year, 47 were

handled by Knight Frank, of which 22 have been sold, six withdrawn from the market, and 19 are still for sale. Graham Adam, of Knight Frank?s Exeter office, blames cynicism among buyers about the economy for the current ?fragile? state of the market. Yet 75% of country properties sold in Devon were still bought by ?outsiders, mainly from London?. Another trend in the market peculiar to Devon, Mr Adam says, is the number of vendors in their 70s who, having retired to the county in their early to mid 50s, now want to move back to the Home Counties to be nearer to their families.

The underlying strength of the crucial middle market is highlighted by the fact that in this trickiest of periods, 52% of houses advertised in Country Life fell into the typical ?family? price range?from ?50,000 to ?m. Not surprisingly, this area also produced the greatest volume of sales achieved. But unlike the buyers of headline-making classic country properties such as Easton Neston in Northamptonshire (£18m, right), Ash Park in Hampshire (£10m), Bruern Abbey in Oxfordshire (£5.5m) and the Weacombe Estate in Somerset (£5m)?all sold by Knight Frank earlier this year?family buyers, however deep their wallets, are driven by practical considerations such as proximity to schools and good railway connections. And here, the prime counties Berkshire, Buckinghamshire, Hampshire, Kent and Sussex, come into their own.

As one of the few remaining counties in England to retain its excellent grammar school system, allied to an efficient and relatively low-cost commuter transport system, Buckinghamshire is increasingly sought after by young families moving to the country for the first time. Whereas an outstanding range of schools, both private and state, makes Winchester the hub of the family market in Hampshire, says Simon North of Lane Fox, whose Winchester office found family buyers for five houses advertised in Country Life between January and June this year. They included The Mill at Droxford, and Bower Farm at Froxfield; both sold for about the asking price of £1.25m.

Despite the general drop in country property values of 3% to 4% during the second quarter of 2005, buyers searching for a good, five-bedroom, family house are facing stiff competition throughout the South-East, says Graham Waterton of Strutt & Parker. ?Anyone looking for such a property in attractive countryside and within easy reach of high-salary jobs will have a nasty surprise if they expect to find lots of bargains?, Mr Waterton warns, adding ?the area round Lewes, East Sussex, popular with commuters to Brighton and London, saw a 3% rise in the cost of this type of house between April and June this year.?

Acknowledgments: I would like to thank the following estate agents who supplied valuable additional information for this review: Butler Sherborn, Carter Jonas, Cluttons, Hamptons International, Humberts, Jackson-Stops and staff, Knight Frank, Lane Fox, Savills and Strutt & Parker.

This article first appeared in Country Life magazine on September 8, 2005. To subscribe click here.