English country estates that escaped recessions, changes in tax laws and inheritance squabbles to remain intact today are rare. Some 18 of them with a value of £10 million or more have changed hands, both privately and publicly, in the past three years. Demand for these rare opportunities appears to rise above wider economic concerns; despite the gloomy conditions of the 2009 market, two mega-estates were launched (in Country Life) and generated healthy interest-Linkenholt in Hampshire and Kiddington in Oxfordshire.
Regardless of last year’s climate, deep-pocketed buyers emerged from the shadows, with Linkenholt going for close to its £25 million guide price. Kiddington raised a few eyebrows when we highlighted its guide of £42 million on our cover, but Mark McAndrew, head of Strutt & Parker’s estates division, says that they had ‘more than 40 people come to view it, which means that many people were sitting on assets of, say, more than £200 million who were considering investing a large part of that in an English estate’.
An estate is essentially a package that includes a principal house, cottages, agricultural buildings, and several hundred acres of farmland as well as sporting land or woodland, and buyers are rarely in the market for a status-symbol boost. ‘There are tax advantages, but this is something you buy with your heart rather than your head,’ says Mr McAndrew. ‘I know of some top people, working for the likes of Goldman Sachs, who take two or three weeks off in August not to go to Mauritius or the Seychelles, but to drive a tractor during harvest-they find it cathartic. In terms of investment, estates are slow burners, but over 20 years, they’ll do you proud.’
‘What’s interesting about this recession is that we haven’t seen the break-up of estates that went on during the 1930s, 1970s and early 1990s,’ explains Crispin Holborow, head of Savills’ country department, which has produced new research into the value of English estates. ‘In the 1990s, marriage values-the premium a buyer might pay for an estate plummeted because no one wanted the burden of upkeep of all the elements. Cottages were a hindrance, not an asset. Today, in some cases, we’re seeing the re-assimilation of estates.’
Savills’ new estate index tracks the value of 20 ‘best in class’ estates that they either manage or have sold over the past three years. Typically, the estate will have an eight-bedroom main house, six cottages and about 800 acres, of which the lion’s share is agricultural and the rest woodland and sporting land.
The research shows that during the prime-country-house boom of 2006 and 2007, estates values were outperforming those of country houses. And, with farmland and woodland values holding up, estates held on to more of their value when the country-house market cooled in 2008. ‘From 2005 to June 2008, values grew by 37%. Today, values exceed those of December 2006, and are 23% higher than those of December 2005.’
The recent sale history of Wansdyke Farm near Hungerford on the Wiltshire/Berkshire borders is one success story. It was launched in September 2002 with a guide price of £12 million and sold in June 2003. Seven years later, with little changed but for the addition of a substantial dairy, it was put back on the market with a guide of £20 million.
Agents argue that country-house valuing is tricky, but an estate is an altogether different juggling act of looking at the components and assessing whether the package is worth more than the sum of its parts. ‘For this premium to kick in, it’s got to all click together,’ says Mr McAndrew. ‘Some estates have the right elements, but they aren’t in the right place.’ Savills agree: ‘The condition, style and position of the house are paramount,’ adds Mr Holborow, who lists the components in order
Perfect estate must-haves
1. The principal house set in the centre of the land
2. Location: hotspots include the Guildford, Winchester and Shaftesbury triangle, along the M4 corridor, and from Henley to Stow-on-the-Wold and across to the M40
4. Good parkland
5. Woodland with a shoot (or possibility to establish)
6. A river or (less popular) lake
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