According to Liam Bailey, head of residential research at Knight Frank, the UK property market has split between an equity-rich top tier and an equity-poor lower tier, in which prospective buyers have struggled to access the mortgage market. This wealth divide is likely to remain a dominant trend in 2011, says Mr Bailey, who expects to see mortgage lenders continuing to target the affluent by maintaining a wide differential in lending rates between the low rates offered to those with equity stakes of 25% or more, and the much higher rates demanded of buyers with limited equity.
In terms of market performance, Knight Frank expect the strongest area still to be central London, whose ‘safe haven’ role is again being recognised by international buyers, as borne out by more than 20 recent sales of properties valued at £10 million or more by the firm’s Kensington and Notting Hill offices. Interestingly, although the sales were mainly to international buyers, all were already based in the UK and had been looking to trade up for more than a year, but only found the confidence to enter the market late last year.
Similar trends are at play in the country-house market, say Knight Frank, who expect to see ‘marginal’ price growth for this sector in 2011, with the gap between ‘the best’ and ‘the rest’ growing ever wider. With wealth generated in the London market continuing to flow out into the Home Counties, Mark Jamieson of Strutt & Parker is confident that south-east England will continue to outperform the rest of the country, with the mid-market (houses in the £1m to £3m price bracket) outperforming the top end.
‘Given the growing social divide between “haves” and “have-nots” and the geographical divide between North and South, we see the market in 2011 as middle lane and hard shoulder with little or no action in the fast lane,’ Mr Jamieson explains. This means that recovery in the private sector of the market is likely to gather pace, as the public-sector market sits on the hard shoulder with its hazard lights on, waiting for the rescue services to arrive. But, he adds, the key question is ‘will vendors be realistic on price?’. If the answer is yes, then there will be cause for optimism in the year ahead.
As the Big Freeze provides some untimely pause for thought, buying agent Jonathan Harington has been watching the ice form inside the windows of his old Northamptonshire farmhouse, and has decided that living in a new house with modern insulation might not be such a bad idea. It’s a notion that is gaining ground within an increasingly energy-conscious country-house market, says Mr Harington, who last year acted in the purchase of three houses built in the past 10 years by private individuals, as well as two sites for clients wishing to do the same thing.
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‘It started about 15 years ago when a couple of developers realised that there weren’t enough old rectories to go around in Hampshire, and started what the Americans call “tear-downs” buying existing houses and replacing them with new ones. They built 5,000sq ft-6,000sq ft houses in the traditional style, and often bought neighbouring land so they ended up with 10 acres or more,’ he explains.
This is a growing niche market, agrees Ed Cunningham of Knight Frank (020-7629 8171), who last year teamed up with specialist country-house developer Fairfax Classical Properties of Ramsbury, Wilt-shire, to sell the quintessential ‘neo-Geo’ Bells Ground Manor at Braishfield, five miles from Romsey, Hampshire, for just under £4m. He is currently offering the neighbouring Fairfax creation, the handsome, 4,700sq ft, Regency-style White Oak, at a guide price of £3.25m.
Built of handmade bricks under a natural slate roof and set in five acres of gardens and grounds in an unspoilt rural setting, White Oak has four elegant reception rooms, six bedrooms, five bathrooms, a large kitchen/breakfast room and plenty of room for a swimming pool and tennis court.
Knight Frank are also selling the impressive, 11,227sq ft Semple House at East Wellow, 13 miles from Winchester, which stands in 18 acres of landscaped grounds overlooking woodland and pasture that once formed part of Florence Nightingale’s family estate. Originally built in 1964 as a replica of the 1770s, Anglo-Palladian James Semple House in Williamsburg, West Virginia reputedly designed in part by Thomas Jefferson-Semple House has been meticulously modernised and refurbished by its present owners, who have decided to live abroad.
Knight Frank quote a guide price of £3.95m for the elegant, Colonial-style house, which has four reception rooms, a cinema, six bedrooms, four bathrooms, a swimming pool and leisure complex, and a self-contained two-bedroom annexe.
The long-awaited opening of the Hindhead tunnel south of Guildford, scheduled for midsummer, is expected to boost the country-property market in the already popular South Downs National Park and Meon Valley areas. But down in east Kent, Sussex-based buying agent Colin Mackenzie has already noted ‘a few pioneers’ who last year saw the advantages of settling in this previously undervalued area of the South-East, which now offers a fast commute-whether by the new Javelin high-speed trains or by motorway direct to Canary Wharf-as well as attractive villages, a choice of classical and period country homes, good schools, and a property market that has yet to catch up with the much more expensive west Kent.
One country property that fits the bill is Red Barn Farm at Mersham-five miles from Ashford and 38 minutes by high-speed train from London St Pancras-for which Kentish agents Calcutt Maclean Wood (01233 812060) quote a guide price of £795,000. Set in 12 acres of gardens and paddocks with a large pond and a resident black swan of uncertain temper, the partly refurbished, five-bedroom farmhouse needs a further £100,000 or so spending on it, says selling agent Nigel Maclean. Equestrian facilities include stabling, a post-and-rail manège and nine acres of paddocks.
London-based buyers are also the driving force in Suffolk, says Charlie Philip of Carter Jonas in Long Melford (01787 882881), who today launches Oak Farm at Cockfield, near Bury St Edmunds, on the market at a guide price of £1.3m. Rebuilt in the 1950s by the owner of the surrounding farm, Oak Farm has been home for the past 34 years to a couple who have modernised it throughout with impeccable taste, but have retained the tranquil feel of the original old farmhouse.
Set at the end of a long, private drive with no intrusive neighbours (‘perfect for a City businessman with a helicopter’), the house stands in six acres of grounds with views ‘to die for’, and has three main reception rooms, five double bedrooms, two bathrooms and some 10,000sq ft of barns and outbuildings.
Mark Wiggin of Strutt & Parker in Shrewsbury maintains that the market in the Midlands represents ‘the real Britain’, unlike the Home Counties, which are cushioned by the ‘unreal’ London market. Mr Wiggin sees no shortage of buyers in his area, but the question remains as to whether or not vendors are prepared to sell at today’s values in other words, those set by the market and not by the vendor-which he expects to fall by a further 5% to 10% in the Midlands this year.
A price deemed ‘realistic’ is the £635,000 guide quoted by Strutt & Parker (01743 284200) for Upper Frankton Grange near the tiny hamlet of English Frankton, which has idyllic views over a scenic part of Shropshire known as the Little Lake District. Converted from the former stables and coach house to the Frankton Grange estate, the house has been greatly improved by the current owners, who have added an extension to the stable block in keeping with the original building, but with the modern comforts of underfloor heating and bespoke bathroom suites.
Set in five acres of gardens and paddocks, it has two main reception rooms, a new fitted kitchen, a large master suite, five/six further bedrooms, three bathrooms and a steam room. Equestrian facilities include six stables, a manège and paddock, with further land available to rent.