Over the last two years the market has experienced more external factors which could influence property prices than at any time for decades.
 

A few years ago, the “pebble in the pond” theory seemed to be fairly reliable, whatever happen to London house prices one could expect the same to ripple out into the Home Counties first and then further afield in the following months. The first time this theory seemed to really fail was following the banking crisis of 2008.  The banks stopped lending in the short term and all residential property prices dropped almost overnight as the market reacted to the global uncertainty. However, London property prices bounced back swiftly aided by the influx of international buyers who sought safety in investing in bricks and mortal and regarded the UK economy and its banking system as one of the best regulated and most honest in the world. On the other hand, the country market did not follow suit and, in some areas, it took anything from five to 10 years for houses to regain their pre 2008 values.

There followed the long rumblings of what became known as Brexit but by late 2019 we were all hoping that the uncertainty over Brexit might be coming to an end.  House prices had reacted poorly to the long running Brexit debate, and it was hoped that as it became known the UK would be leaving the EU, we could look forward to 2020 with a degree of optimism.  How wrong we were, none of us had read the signs and we did not appreciate that Coronavirus would reach Europe let alone our island nation. The unthinkable became reality - lockdown, furlough, working from home, home schooling, a SDLT holiday and international travel restrictions. This was uncharted territory.

In many respects the housing market is like any other commodity market, dependent upon supply and demand or a willing buyer and a willing seller. So far it has stood up well to the rigours of the last two years, despite all of the external influences. For this one must be grateful as for most people their house is their single most important investment. 

Historically other markets have been less fortunate when outside influences have tried to control prices or supplies. For example, in the 1950s the international rubber markets suffered significant trading difficulties at first as a result of both the US and UK governments, frightened of shortages and high prices, they stockpiled natural rubber, only later to have difficulty selling and supressing the price when it was found their supplies were unnecessary. 25 years later and the international tin market ran into trouble when the tin buffer stock, created to smooth dramatic fluctuations in the market price, failed significantly, jeopardised the world trade in tin and it being traded on the London Metal Exchange. In more recent years we have seen EU butter mountains and Italian wine lakes.  

So, as we hopefully tip toe out of the Covid crisis, keeping our fingers crossed there will be no more variants to stop us in our tracks, what does the country house market look like?  It would appear that it has come through the last couple of years reasonably well. Having experience lockdown, the need for outside space has become increasingly important and many families have decided to move into the countryside or at least into a more rural area - houses with a garden one of the top priorities.  

We have a finite supply of land upon which to build houses and despite encouragement from central government we are not building houses fast enough to meet demand. Interest rates, though they may well rise in time, are still historically low and this has encouraged more people to enter the housing market.  

We may well see more elderly people considering whether they want to downsize and be nearer shops and other facilities but at the same time there looks set to be those with families wanting to have more space and freedom. Houses that are pleasing to the eye and in a good location continue to be in greatest demand.

Next time we will look into whether buyers have changed their minds when it comes to open plan living, whether they want to have a formal dining area rather than always expecting to dine out. Whether being within an easy commute to the office is still a priority and have we really turned into a nation of passionate gardeners.

Dawn Carritt
Consultant
Jackson-Stops Country Houses 
September, 2021
020 7664 6646