Solicitors and agents with their ears to the ground apparently got wind of the fact that the much-discussed Mansion Tax was actually going to be a Stamp Duty increase on properties worth
£2 million and above a day or two before George Osborne made his announcement. But for most of us, the revelation came when the BBC reported the news on the morning of the budget, and it sparked a buying frenzy in the hours leading up to midnight. Between Savills and Knight Frank, £170 million worth of sales were pushed through, with many agents negotiating last-minute deals at just £1 below the threshold.
The day following the budget, those keeping a beady eye on property websites would have noticed that some houses in London priced at £2.2 million were immediately re-priced at £1.99 million. Many agents now say that those properties that, before the budget, would have been valued at between £2 million and £2.5 million are now entering a hinterland of awkward valuation-either the price is pushed up by competitive bids or vendors have to realign their expectations and price below the threshold.
‘And it’s not as simple as it used to be nowadays to recover value by selling fixtures and fittings separately,’ cautions Bobby Hall of The Buying Solution. On a positive note, his colleague Jonathan Bramwell believes the new threshold will actually encourage buyers who are dithering about selling in London and moving to the country to actually take the plunge. ‘We’ve seen the bottom of the market in the country, and £2 million will buy you an awful lot of country house with the price differential today.’
Whether it can be attributed to Vince Cable’s threatened Mansion Tax or not, the market in the country so far this year has primarily focused on houses below the £2 million price band. Savills’ prime regional index, which tracks the country-house market every quarter, is also calling the bottom of the market, with houses in commuter hot-spots such as Henley, Guildford, and Esher showing strong growth since the start of 2012.
‘There was a noticeable increase in buyer numbers from London in the Home Counties this quarter,’ says Yolande Barnes, head of Savills Research. ‘In January, we said that 2012 would offer unprecedented opportunities for buyers selling in London and buying in the country, and some of them now appear to be taking that opportunity. The price differential between London and the country has opened to its widest ever, triggering interest from Londoners priced out of larger homes in the capital.’
Other country-house agents agree that early green shoots are being felt, primarily in the areas within easy reach of London. James Grillo of Chesterton Humberts says that some of the houses he’s handled this year have gone under offer in a matter of days. ‘Where they tick all the boxes and have been openly and overtly offered for sale, they have gone quickly,’ he says. ‘But this isn’t the case across the whole of the UK, and we are seeing more demand for those that are commutable to London.’
Similarly, new buyers registering on the books of the Home Counties offices in Knight Frank rose by one-third between January and March. ‘Here, a rise in new supply was more than matched by growing demand. We expect even more activity in the traditional selling of April, May and June,’ says a buoyant Rupert Sweeting of Knight Frank.
Value in Cornwall?
The steepest price falls are still being seen in Cornish second-home spots, reports Savills. Cash-rich bonus buyers who drove prices skywards in 2006/7 have now withdrawn from the market, leaving prices to recalibrate to levels within reach of the wealthier locals, rather than just national holiday-home buyers. Although the prime Cornish market is now some 28% down on peak, the market is sluggish because sellers are ‘remaining stubbornly attached to unrealistically high asking prices,’ says Mrs Barnes. By contrast, prices in the more accessible areas of Devon remain flat year on year.
* Subscribe to Country Life and save over £50 a year