The focus of much media attention in recent months has been the surge in foreign buyers snapping up London property thanks to Sterling's long-lasting weakness – but there's more to Britain than its capital city, and now the country house market is also recovering well from the downturn thanks to increased interest from overseas.
One agency suggests country estates' values fell up to 20 per cent during the depths of the recession in late 2008 and early 2009 with many properties lying unsold. Now agents report a 30 per cent fall in the number of estates on their books compared to a year ago with a 30 per cent rise in the number of purchasers – many of them from abroad.
"Because there's so much money in the country estate system, with individual transactions of £10 million (Dh52.8m) plus, it's taken longer to reach the bottom of the recession than in other sectors. Even so, buyers from a broader range of locations than ever before because Sterling is so weak. About 50 per cent of my work is for overseas clients" explains Ed Sugden of the buying agency Property Vision.
Most British country estate sales are discretionary, Sugden says, so sellers are reluctant to accept low offers at first as they can afford to wait. As a result, estate transactions can drag on for months or years. But when buyers scent that a sale is "forced" and must happen quickly, offers tumble and vendors relent.
Large individual country houses can be secured for £1m to £2.5m across Britain. But those houses with 100 or more acres of land and often including individual farms, tend to cost from anything from £3m to £30m or even more. The higher the value, the more likely it is that transactions will be conducted by buying agents such as Property Vision, who work on behalf of individual clients to find appropriate homes and then bargain down the price without the property even going on the open market.
Purchasers from a few overseas locations have fallen by the wayside during the recession.
"For example, demand from Irish and Danish buyers for UK farms and estates has declined over the past 18 months primarily due to financial problems in their own countries and a resulting reduction in the value of their domestic farmland" says David Hebditch of rural agency Chesterton Humberts. A sharp rise in the price of British agricultural land – now typically £6,000 an acre – has also deterred demand.
But the still-weak pound is drawing other purchasers from around the world, especially those who want an estate for reasons of privacy, investment or status rather than intensive agricultural use.
"The Russians are back. We're seeing Chinese and Indians in the Home Counties near London. An Australian bought Compton Castle [in Somerset, 240km west] for £15m, in the first big estate deal this year" says Mark Lawson of The Buying Solution. Other buying agents say clients from the Middle East, Scandinavia and the US are appearing, too, and for the first time since before the recession, international buyers are beginning to stray outside the usual "one hour's drive" radius of London.
"There have certainly been a few foreign clients to perk up the south west market. Foreign buyers now realise that England isn't huge and the exchange rate may offer a once-only opportunity to buy for such good value," reports Gideon Sumption of Stacks' buying agency in Devon, a rural county 320km south west of London.
He recently secured a 25 per cent reduction on an estate marketed initially for £22m in 2007 and says this is a typical result on any over-priced property than lingers on sale.
"There's a lot of price sensitivity and thankfully most sellers coming to the market today are steering clear of the stratospherically-priced nonsense approach seen in 2007. Now if a good, unblemished estate is sensibly priced, it will sell relatively quickly because stock is so thin," says Sumption.
Like many prime property markets, the estates sector across Britain saw a lull in transactions before the election earlier this month. Much of that lull came from domestic buyers who were concerned about mooted 'mansion taxes' which have not come to fruition with the new coalition government in Westminster. Yet even with the election over, the sharp public spending cuts announced this week – with many more to come – suggest that sterling is not recovering anytime soon.
As Ed Sugden puts it: "The pound looks likely to remain weak for some time. That may well bring more international buyers to Britain and would be a substantial help to the market."
- The author is a Property Correspondent for The Observer