(Commonwealth) _ Home sellers in the countryside are facing challenges in finding buyers, a departure from the rural home sales boom during the pandemic. The prices of country houses with an average value of at least £2 million soared by 10.4% in the year to September 2021, according to Savills estate agency. However, the current reality of higher mortgage rates and the end of the work-from-home bubble has cooled the market.
Many urban dwellers who moved to the countryside during the pandemic are reconsidering their decisions as the need to return to city work for the majority of the week becomes apparent. For instance, James and Samantha, who relocated to Somerset from London during the early days of COVID-19, are now selling their Georgian house because the daily commute of over two hours each way has become too burdensome.
Property prices in prime regional markets have declined by 6% since the “mini” Budget in September 2022 that triggered an increase in mortgage rates. Lucian Cook, head of residential research at Savills, notes that rural markets experienced sharper declines compared to city locations as buyers prioritized practical aspects such as commuting convenience and limited their debt.
Areas like Swanage in Dorset and St Ives in Cornwall, which saw overheated markets during the pandemic, are now experiencing slow sales processes, with properties taking significantly longer to find buyers compared to the previous year. Discounts of up to 10% are not uncommon in some parts of Cornwall, especially for properties lacking prime locations or distinctive features.
While the cooling Cornish property market hasn’t yet alleviated the local housing crisis, other areas, such as Rutland, are bucking the trend. Rutland has seen a 6.5% rise in property prices over the past year, with values now 28% higher than in 2019. This growth is partly driven by Londoners who find Rutland’s housing market more affordable than other popular destinations like the Cotswolds.
Londoners are also moving to the Cotswolds, where property values in West Oxfordshire have increased by 4.7% over the past year. The region’s appeal includes its unique lifestyle offerings such as Daylesford Organic and Soho Farmhouse, as well as venues like Estelle Manor and the Bull pub in Charlbury, which cater to those seeking a blend of urban luxuries in a rural setting.
Despite the broader cooling trend, the prospect of falling inflation and potential Bank of England rate cuts offer a positive outlook for the market. Savills reports a 24% increase in the volume of sales agreed upon country houses in the first quarter of this year compared to the same period in 2023.
Homeowners of rural properties, which have appreciated by 23% over the past five years according to the Nationwide Building Society, need to adjust their expectations to market realities. Realistic pricing is essential for securing a sale in 2024 and taking advantage of improving market conditions.
While some homes continue to struggle on the market, greater choice is prompting some buyers to act. For example, David, who had been looking to move to Wiltshire with his family, found a farmhouse priced at £3.5 million that had previously struggled to sell. When the estate agent relisted it in January, David and another buyer were quick to pursue the opportunity.
The shift in rural home sales reflects evolving buyer priorities and economic conditions. While there are challenges for sellers, particularly in terms of realistic pricing and market expectations, there are also opportunities for both buyers and sellers as the market adjusts and new trends emerge.
