“This does not appear, however, to deter wealthy overseas buyers, who continue to drive the Prime Central London market with investment as well as lifestyle purchases. Interestingly, the Home Counties has also seen a substantial increase in transactions at the top of the market, with 12 purchases above £15m so far this year, compared to just one recorded in 2010. The continued global financial uncertainty, particularly in a number of European countries, means that the UK is even more attractive to the overseas buyer – not only because of history and culture, but also because of political stability and a secure legal system.
“In the long term, I don’t expect that increased property taxes will deter buyers; they might lower values around the £2m price range perhaps, but people do tend to carry on as normal once they have assimilated tax changes into their financial structures.”
Home Counties (Berkshire, Buckinghamshire, Surrey, South Oxfordshire, West Sussex)
Nick Mead, Associate in the Home Counties, comments: “In the last quarter, the majority of the market activity has been focused on property priced up to £1.5m, mostly from needs-driven UK buyers who are moving out of London for schooling and more space. Meanwhile, the £2m-£3m market has been significantly affected by the increase in stamp duty, and the proposed ‘mansion tax’ has further dampened this market. We’re seeing a continued flurry of price reductions which, if anything, has grown in recent weeks.
“Ultimately, those who are likely to bear the brunt of a mansion tax are likely to be those who are already suffering the effects of middle-class poverty – the asset rich and the cash poor. The sooner plans for the mansion tax and proposed higher rate council tax bands are finalised, the better, as the uncertainty and speculation is weighing heavily on the market. On a short to medium term basis, it is likely to actually lead to a reduction in the revenue that the exchequer might receive due to a fall in transactions.”
Mark Lawson, Partner and Head of the Home Counties team, adds: “Contrary to the above, the top-end market in the Home Counties has been incredibly active. To our knowledge, in 2010, there was just one transaction at £15m+ – last year there were eight in total, and this year, there have already been 12 deals at £15m and above. This increase in transactions has been fuelled by international buyers who are seeing better value outside of Prime London with prices approximately £1,000 per sq ft for a top-quality property in the Home Counties, compared to more than £6,000 per sq ft in Prime Central London.”
The Southern Region (M3/M4 corridors: West Berkshire, Hampshire, Wiltshire, Dorset and Somerset)
Bobby Hall, Head of the Southern Region, comments: “Not surprisingly, there has been fewer transactions this period (July-September) than this time last year, although we have seen a few properties in the £2m-£4m price range go under offer on the private market. We have recently been involved in the purchase of a property which was offered very quietly ahead of a planned marketing campaign in 2013. If the house is right and the price is right; deals are being done.
“On a micro level, the closure of Norman Court School near Salisbury in July has meant that some people have had to relocate for schooling, which has created even more competition for property near to good schools in the area.”
Cotswolds and Central region (Gloucs, Oxfordshire, Warwickshire, Northants, Herefordshire, Worcestershire)
Jonathan Bramwell, Head of the Cotswolds and Central region, comments: “Our region has certainly seen a much more buoyant market compared to a year ago. We are seeing most activity in the £1m-£2m price range which is unsurprising in light of the increase in stamp duty. Although, there have been some significant sales at the £5m plus level which just shows that ‘best in class’ properties will always create interest – especially if within a one to one and a half hour journey from London. However, the biggest issue as we head into the autumn market is supply, and what does come onto the market needs to be correctly priced to spark interest. Buyers are prepared to purchase, but only if the price is right; if a house looks expensive, it can be quickly dismissed!
“The town markets, for example Oxford and Cheltenham, are still pretty strong due to the usual pull of good schooling, however, further out – where there are now fewer second home buyers – there are some good deals to be had. For example, around Malvern which is out of reach of the daily London commuter but still has some very good schools, you can purchase a period 6 to 7 bedroom house with 10 to 15 acres and outbuildings for £1.5m. Whereas in ‘Prime Cotswold’ locations such as around Chipping Norton and Stow-on-the-Wold which benefit from being in the catchment area of Oxford and Cheltenham schools and have good commuter links to London, £1.5m would buy a 5 bedroom house with 1 to 5 acres. As such, for those wanting more ‘house and space’ for their budget, it may be beneficial to look beyond the Prime areas.”
Estates / land
Mark Lawson, Partner and Head of Home Counties and Country Estates, comments: “Good quality farmland is still selling well despite the weak harvest this year. This is for several reasons: there has been less on the market this year compared to last year, leading to a shortage of good quality farmland to purchase, food prices are rising significantly, particularly due to the poor harvests in places like American and Russia, and although food prices are rising, it’s the one thing people won’t go without – they can sacrifice their cars but won’t go without their loaf of bread! At the same time, the world population is growing so there is even more demand for food (and will be in future). There are still good tax advantages, too, all of which means that farmland is deemed a good investment.”
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