Much has been reported in the last few weeks about the economic uncertainty and the impact of the continued rising of interest rates on the property market. We caught up with the Head of our National Country Agency Team (NCAT), Matthew Allen, to find out what is going on in the top end of the market.
"The housing market consistently hits the headlines with a few fairly unhelpful soundbites affecting people’s confidence. This together with the obvious cost of borrowing changing at alarming rates, mortgage brokers have been struggling to pin down the best rates for their clients.
“The volatility is certainly more prevalent in some of the lower value and middle markets where buyers are more heavily mortgage reliant. There is still a lack of supply of good quality village and country property and there is no significant evidence of dramatic drops in prices at this stage across all price levels.
“The prime country and farms market are also somewhat insulated from these impacts with borrowing less required and on lower loan-to-value percentages. We have seen healthy competition for the good quality village and country properties above £1.5 million across the country if there are limited compromises. The strength of demand for a period dwelling with outbuildings and a few acres remains high with a number of recent examples of strong competitive bidding.
“People have stagnated their decision-making for too long due to the market pauses during Brexit and Covid and are now looking to still capitalise on the recent price rises. This has led to some disparity between vendor expectations and what buyers are prepared to pay given what they are hearing in the press, but the gap has been closing recently as vendors are becoming more realistic and don’t want to be languishing on the market for too long. We have also seen a significant upturn in older retiring sellers who now have a more urgent need to downsize putting a little more property into the marketplace.
“In the farms and land market there has certainly been a larger influx of bare land onto the market in 2023 compared to this time in 2022. This is also being met by healthy demand with bigger blocks of bare land still appealing to rollover, institutional and environmentally focused buyers. They are still prepared to regularly pay between £10,000 and £15,000 per acre for good-sized blocks. We also expect to see a continued supply of smaller farms coming to the market in the coming months as the pressures of a declining Basic Payment Scheme (BPS) payment and a greater level of serviceability demand from the banks push peoples' decision-making process. However, this will create opportunities for others in what is certainly a fast-changing marketplace.
“I think there should be the reassurance that there is still good demand for the high-quality village and country property with complete farms and particularly blocks of bare land still highly prized for what might be a once-in-a-generation opportunity.”