Where have all the houses gone…..?
Looking back over 2023, the downward spiral of the prime country market that followed the end of Boris and his ‘bounce’ the previous September was only too evident. Despite inflation halving year on year, continuing economic (and political) uncertainty deterred too many owners from entering the market – whilst buyers (partly influenced by the cost of borrowing and the revenue cost of country house ownership) tightened their budgets whilst remaining reluctant to compromise on their search criteria.
The result – for the prime (£1.5m to £3m) country markets across the south east was stagnation; indeed, we had never experienced such a downturn in the number of prime instructions in the 20 years since we established (and ONS statistics confirm that the number of residential property transactions fell by 18% year on year). Only the ‘super-prime’ (£3 million plus) market seemed to shrug off this downturn – buyers being prepared to transact if they achieved their ambition.
By its very nature, estate agency is fueled by a perennial sense of optimism – and this largely shielded the market from this new reality (unless you were watching the property portals, where it became evident that the number of price reductions well exceeded the number of new instructions – or witnessed office closures and tightening staff numbers in some high profile firms). It seems bizarre to us to find, when requesting a viewing appointment, some agents still asking whether our client ‘is proceedable’, at a time when some apparently saleable houses remain in the market after 18 months, despite price reductions by as much as 30%!
For the year ahead. there seems a consensus that the market will ‘pick up in the spring’ (which might begin as early as March!) – also that the build up to an October General Election will make this relatively short lived (probably dissipating by late June).
We remain concerned that the continuing shortage of prime country instructions still motivates some selling agents to recommend asking prices that inflate reality by 10% or more (fearing that they won’t win the instruction unless their valuation is the highest) – which could well leave many new vendors without a safety net before the market cools again in the late summer.
Fortunately, our clients remain active, mostly motivated by the ambition of securing the right property for their long term enjoyment than necessarily cutting the best bargain; our challenge remains finding unconventional ways of sourcing the right properties.
Having witnessed six Labour governments over Colin’s career (!), experience predicts that the prime market will rapidly acclimatize to a new regime and benefit from both the relative stability (and probable profligacy!) that is likely to follow; we can only hope that 2025 doesn’t start with a ‘hung’ parliament…..