Very top end of country house market ‘may have had most active year since 1980s’

The upper end of the country house market may just have witnessed its most active year since the 1980s, according to an estate agents.

Savills said substantial country houses at the £2 million price point have typically boosted their value by £111,000 this year, as demand for larger homes with gardens has grown.

Its prime property market report said that, after years of underperforming, the country house market saw values rise by an average of 5.5% in 2020, marking the strongest price performance for this sector since 2010.

Lucian Cook, head of residential research at Savills said that, in terms of market activity: “The very top end of the country house market, in particular, has had an extraordinary year, perhaps its best since the 1980s, as buyers sought a lifestyle shift and recognised the relative value on offer.”

The South West, the Cotswolds and Scotland have been particularly active markets, the report said.

Properties offering buyers opportunities to change their lifestyles and second homes in the prime coastal and £2 million-plus country house markets have been the “standout performers of 2020”, the report said.

Savills said demand for prime coastal properties has been intense, both from second homes buyers and families seeking a lifestyle relocation, pushing prices up by an average of 5.6%, with Devon, Cornwall, Dorset and Norfolk proving popular destinations.

By contrast, flats or small terraced houses in central London of similar value but with little outdoor space have endured price falls of around £8,000 on average, Savills’ analysis of the UK’s prime residential market found.

Savills said that in the rest of the prime London market, where £2 million would typically secure an additional 1,000 square feet of accommodation and more garden space, gains have averaged £36,000.

It added that figures from data agency TwentyCi show that the number of sales of £1 million-plus properties agreed in the 11 months to the end of November was 29% higher than in the same period last year, despite a significant fall in activity during the first national lockdown.

Beyond London they have increased by 43%, it said.

Mr Cook said: “The unique circumstances of 2020 have led to a surge in market activity at the top end of the housing market.

“This has supported prices and delivered some unexpected gains, but it hasn’t resulted in runaway price growth.”

Overall, prime regional house prices, encompassing the top 5% to 10% of the market by value outside London, increased by 3.6% across the year, while prime London values increased by an average of just 1.1%, Savills said.

Within London, the trends for more space seen this year favoured traditional family house markets such as Chiswick, Fulham, Putney and Richmond, and in central London the stronger markets were in Notting Hill, Holland Park and Bayswater, which combine good local amenities, access to green space, “walkability” and good family housing stock, the report said.

Mr Cook said: “Given the practical implications of Covid-19, the prime central London market has relied on demand from domestic buyers and resident non-doms in 2020.

“In light of that, it has held up well but it simply hasn’t been able to match the performance of the regional markets or indeed the leafier parts of outer prime London.”

Looking to the months ahead, Mr Cook said: “Recent results from our survey of over 1,300 prospective buyers and sellers suggest that the stamp duty holiday has provided an added motivation to buy and that there are concerns about the ability to purchase before it ends on March 31 next year.

“But it also indicates that renewed social distancing measures have made buyers more committed to a move over the next 12 months, and that a successful roll out of vaccines will support that further, especially in markets such as central London which have been held back by international travel restrictions.

“As a consequence, while the uncertain economic and political backdrop is likely to mean the prime market remains price sensitive during 2021, we expect activity to remain relatively strong into the spring and less exposed than other parts of the housing market to a subsequent cooling off, with prime central London looking a ‘buy’ opportunity, particularly for dollar buyers.”