UK country house prices hit four-year high in ‘race for space’
Record demand for country houses in the UK has driven prices to a four-year high, with wealthy buyers flocking to Worcester in the West Midlands and Cobham in Surrey in a “race for space”.
Prices for country houses, including cottages, farm houses and manor houses, rose 2% in the three months to September from the previous quarter, according to the estate agent Knight Frank, as the number of offers accepted outside London hit an all-time record.
Compared with the third quarter of last year, prices rose by 2.3%, the highest annual growth rate since March 2016, when the impending 3% surcharge on second home purchases led to buyers rushing to complete ahead of its introduction.
With working from home becoming a long-term reality for many office workers in the wake of the coronavirus pandemic, those who can afford to do so have been moving out of London and other big cities into more rural areas in search of larger houses. The stamp duty cut announced in July has also fuelled demand.
In the West Midlands, prices for country houses rose by 3.7% on the quarter, led by Worcester, while north Surrey recorded a 3.1% price rise, with Cobham, Ascot, Esher and Weybridge among the most popular locations. In the south-east and the east of England prices rose by 2.1%, with the area around Basingstoke proving popular.
Chris Druce, a senior research analyst at Knight Frank, said: “Worcester is an example of somewhere that offers both greenery and space that hasn’t traditionally been considered an easy location to commute full-time from. Following lockdown and the adoption of WFH [working from home] widely, this perception and indeed people’s requirements have changed.”
People had realised they did not need to be right next to a train station as they were commuting less, he said, and that “an extra 20 or 30 minutes on the train will get you a much bigger house”.
Prices for country houses valued at less than £1m rose by 1.8% on the previous quarter, while those valued at more than £1m recorded growth of 2.3%, Knight Frank said. Houses valued at £3m to £4m were most in demand, where prices rose 2.9% on the quarter.
Other data from estate agents and mortgage lenders has shown that property prices are on the rise in leafy commuter towns, while rents for flats in some areas of central London and cities such as Edinburgh are sharply down.
However, Knight Frank said there were some signs of a slowdown, amid the resurgence of the Covid-19 virus, fresh lockdowns and the weakening job market. While the number of property viewings remained at 35% above the five-year average, they had been slowing.
Despite this, offers for houses accepted outside London were still at an all-time high in the second week of October, suggesting exchanges would continue to rise in the run-up to Christmas.