There’s been huge sale price inflation in the rarified high-end country estate market according to a buying agent.
Jess Simpson, who runs Oxfordshire-based Jess Simpson Property Search, defines the top-end country estate market as including properties worth £10m with 100-plus acres.
This niche saw a 20 per cent year-on-year increase in transactions in 2021, with more estates trading than in any other year in the last decade, according to Simpson.
She says a total of almost £500m worth of property in this sector was traded last year, with premium prices particularly common in the Cotswolds which accounted for a quarter of sales at a cool 25 per cent on average over 2020 levels.
“There are usually only a small handful of deals at the very top end of the market but 2021 saw an extraordinary number of transactions, almost half of which were completely off market.
“The post pandemic demand and premium prices achieved in 2020 is likely to have further stimulated the market. Not only did the Cotswolds perform well, but these premiums are rippling out to surrounding counties such as Hampshire and Wiltshire.
“The market is so competitive that in some cases, buyers committed to purchasing without seeing the estate in the flesh.
“We purchased an estate over £20m in Berkshire for a client, off market, which we felt offered good value. We bid the guide without the clients seeing it and exchanged quickly. If that had been left to get to competitive bidding, we would have most certainly paid more.
“In Hampshire, we purchased an agricultural estate for a private farming family clients looking to invest in land. We bid against rewilding funds and institutions who are extremely prevalent in the market. The bidding got very competitive and after three weeks of bidding we eventually won it.
“Whilst premium prices are being achieved, there is a huge adjustment happening in terms of values. The question is whether buyers will continue to stomach competitive bidding situations and compromises, most notably on completion timings. It’s not unusual to have to offer up to 12 months (sometimes 18 months) to allow the sellers to find their next property.
“This is the single biggest factor in hampering supply of properties to the market – there simply isn’t enough choice to entice would-be sellers to move on. Those that are trading have often been approached by a buying agent (such as ourselves) or a proactive selling agent seeing an opportunity to put together a deal tempting sellers on the back of a price they may never get again.
“In addition, fewer buyers are prepared to consider large projects due to the length of time it’s taking to get planning, the lead in times for builders, material shortages and up to a 40 per cent increase in build costs in some cases, unless they are architecturally special in an absolutely A** location. This restricts an already constrained market.”
Simpson adds: “Unsurprisingly, the number of overseas buyers was at an all-time low last year with only 12 per cent from overseas, all having ties back to the UK.
“The UK buyers were predominantly self-made entrepreneurs or very senior industry leaders. This sets the scene for a busy market in 2022 as overseas buyers enter the fray again in an already hot domestic market.”