Published by Jackson-Stops since 1997, the UK Market Review is a concise overview, drawn from insights and data from some 40 offices across the London and Country House markets, plus national statistics.
COUNTRY MARKET COMMENT
Supply fuels demand
Why economic theory can seem to count for little, in the country house market.
Our stock of houses fresh to the market, is up 26% year-on-year. Counter-intuitively perhaps, our number of newly-registered buyers has risen, almost as much. From an economic, ‘supply vs. demand’ perspective, this feels odd: how can supply, fuel demand? It does so, because most of our would-be house buyers don’t have to move. When supply is exceptionally tight, they stop looking, vowing to return at a time when there is more choice and a better chance of getting the house they want. Having a greater choice, that time is now.
It helps, of course, that interest rates are continuing their slow fall, though economists would point out that this welcome news has come, in part, because the national picture is so uninspiring (not for nothing is it called the dismal science). More positively, they might
also point to above-inflation wage growth, since mid-2023. This is helping to strengthen lower end, owner-occupier demand. The essential role of that demand in underpinning the market as a whole has been reasserting itself, because of fewer sales to buy-to-let landlords, holiday home operators and, with exceptions, overseas buyers.
Less competition and improved salaries are giving young people keen to leave the rental sector a better chance, hence the Halifax report of a 20% increase in mortgages granted to first time buyers. This also goes some way towards explaining the widespread peaking of rents, despite a problematic shortage of supply: renters, are buying. Increases in Stamp Duty Land Tax from April 2025 will hurt but, with first time buyers of a £350,000 home paying an extra £2,500, hopefully not that much.
Conventional economics might also suggest that public interest in price growth variations between different regions, exists because it influences where people choose to live. In practice, amongst the lifestyle, work and family considerations which jostle for priority before any of us draw a circle on the map when looking to move, ‘expected ROI’ doesn’t get a look-in. Our interest is territorial: we all want to know how where we live, compares with everywhere else. Even then, the lesson of such comparisons is that things tend to even out over time. For example, looking just at detached houses in the decade to 2005, Cornwall saw far more capital growth than most (14% pa against 11% pa for England as a whole), only to then see almost no growth in the following decade and, in the ten years to 2025, an exactly average 4% pa. Looking
more broadly at price growth over those three decades (see table), perhaps more striking is how much of it was in the first one. Since then – or, more probably, since 2008 – values have essentially matched inflation. Here, our economists would stress that this is as it should be: real assets maintain their value. The bonus with a house, is that you get to live in it, too.
Expectations of ‘inflation but no more’ capital growth remain highly relevant today, especially to younger buyers who, throughout their working lives, have known little but ultra-low interest rates (which were below 3% for nearly 13 years, until late 2022). Armed with good market data, fixed borrowing limits and more choice they, like the cash-rich but income-fixed older buyers prevalent beyond the commuter belts, will only pay a premium, when it is clearly worth it. To command that, you, as a seller, need to show a prepared path to the ownership of your house, as free of obstacles as possible.
Country houses can be complicated. Owners know this, but it’s rarely front-of-mind until they decide to move. Only then do some recall that, for example, their home is one
of the 14% not registered with the Land Registry, or that there are problems relating to say, rights of way, or Listed Building works. Fear of such issues coming to light only after a sale has been agreed, is common amongst buyers, as is a desire for information about running costs (buildings insurance has been a hot topic of late). Thus when we can show a potential buyer, both a schedule of costs and that all legal and technical aspects are in order, it creates not just relief, but excitement. It creates such certainty about the steps ahead that buyers feel ownership and the new life they seek, are genuinely within reach. So they bid more, more confidently. Which, in fairness to economists, is entirely consistent with their theories about risk and the value of certainty.
LONDON MARKET COMMENT
A world-class investment
After an exceptionally busy twelve months, there is still strong demand for housing in the capital with attractive long-term investment opportunities.
The start of the year presents an exciting opportunity for sellers and landlords as the demand to live, study and work in London remains at a record high. Buyers and tenants are pressing on with planned moves, and many are searching for high-quality property in the best locations. Buyers have seen mortgage rates settle, which has caused lenders to compete and allows for more flexible lending
Left and Above: Pimlico, £6,933pm (£1,600pw) (Pimlico & Westminster)
criteria. This, combined with our proactive approach, means that we are regularly receiving exceptional offers from buyers and tenants, and we expect this to continue towards the summer.
Jackson-Stops continue to deliver a first-class service, forming lasting relationships with sellers and landlords built on trust. With offices positioned in the desirable locations of Mayfair and Pimlico in prime London, and Teddington, Wimbledon and Weybridge in Greater London, our core values remain unchanged: expert teams who understand the local market and the needs of their clients.
The professionalism of our colleagues and their expert knowledge is the reason why Jackson-Stops is the go-to agent when it comes to selling or letting London property. Sellers and landlords are reassured by our presence on the high street and the knowledge that our teams visit every home to ensure we deliver the very best service. Jackson-Stops makes no excuse for taking a traditional approach to Estate Agency, guiding and advising clients through local expertise. We spend on average over 200 hours working on a successful transaction, so we're confident we can get the best price for our clients.
Our proactive approach to generating viewings by speaking to our national database ensures we consistently deliver the best results.
Similarly, we support our landlords by finding first-rate tenants, largely corporate or professionals, looking for longer-term tenancies. Our primary aim is to deliver the best result for our landlords to ensure we never have empty properties. Most properties we look after are managed, as landlords trust us to care for their assets and keep them in prime condition. These managed homes receive the attention of our dedicated Property Managers, who are never more than 15 minutes away from the properties in their portfolio. Customer
feedback is essential to the business, as we know that our clients have a choice over who they partner with. We are proud to have received thousands of Google reviews with an average rating of 4.8 out of 5 stars, a testament to the hard work of dedicated colleagues. This makes it clear to our clients how well their local office performs, as our talented teams strive to deliver an excellent customer journey and superior results every time.
We are here to support you through your property journey, so should you be considering a move, our advice is not to delay. Our local experts will be delighted to assist and are ready to provide professional advice tailored to your needs.
Below:
Left: West Wimbledon, £4,000pm (£923pw) (Wimbledon)
Weybridge, £1,750,000 guide (Weybridge)
Right and Inset: Norfolk £450,000 (plot) (Burnham Market)
Below and Inset: North Devon, excess
£1,500,000 guide (Barnstaple)
Images on page 9 are computer generated.
NEW HOMES & DEVELOPMENTS
Options, with options
Landowners large and small are being encouraged to sell options to developers.
As Westminster’s plans to increase housebuilding have progressed, so, too, has the number of enquiries we receive from landowners who have been asked if they would sell an ‘Option to Purchase’. Some have 50 acres or more,
others simply a large garden. Before they do anything, the uninitiated want to know what their options, in relation to options, are.
DEVELOPER OPTION
A variety of standard agreements with different purposes have emerged over the years. The majority today involve a developer having a right of first refusal to buy land at an agreed discount to its market value, when planning permission is secured. The seller can
challenge the price offered but, ultimately, is contracted to sell. Most agreements also oblige developers to actively seek planning within agreed timelines. Owners thus avoid the pain and expense of negotiating the planning system and get close to full development value. Developers avoid the risks of buying land without planning and of having to buy consented land on the open market. However, as James Gibbs of the Exeter Land & New Homes Team
£650,000 (plot) (Alderley Edge)
Below: Devon
£319,950 to £592,500 guide (Exeter)
Images on page 10 are computer generated.
Left: Cheshire
Below: Suffolk
points out, such a contract also means that “the developers are often your best friend until permission is secured, at which point, interests diverge. They have an incentive to argue for a low market value as they are the ones who have to pay it”.
PROMOTION AGREEMENT
To overcome this non-alignment of interests, landowners can instead choose to enter into an option agreement not with a developer, but with a land promoter. The promoter, too, will fund and run the planning process and seek to maximise value, but in return for a share of the proceeds when the site is sold. Thus the promotor secures planning permission and then promotes the site amongst housebuilders, looking to sell to the highest bidder. This neatly overcomes the alignment issue and the fears of some owners that developers might secure planning for a lesser scheme, only to go back to the planners for more once they own the land themselves. Which option, is the best option? James advises that it is largely down to plot size: “With a plot for just a few houses, costs and outcomes are more certain and margins smaller, so a developer builder tends to be preferable. With an area large enough to be of interest to the regional or national house builders though, I would often want an experienced land promoter with some 'skin in the game' on my side, throughout”.
CONFIDENCE IN FLATS AND MORE
Accord have enhanced their 99% first time buyer mortgage offer to include flats, not just freehold houses, lending up to £495,000 on £500,000. Unusually, neither they nor Skipton (which offers 100% loans) insist on guarantor support at this level of loan-to-value (LTV). Meanwhile, other lenders, including Halifax and Nationwide, have increased their accepted income multiples: in the latter’s case, to six times joint salaries on a 95% loan. Not to be out-done, Santander made the apparently brave move –since followed by HSBC – to be first in returning to offer fixed rate, five year mortgages under 4%.
Individually, each of these moves could be dismissed as attempts, in an intensely competitive market, to gain market share, and there is often a catch (Accord’s rates are high, the Santander offer had a 60% LTV limit and HSBC's requires £100,000 in salary or savings). Collectively, though, that competitiveness and the appetite for risk which these products embrace, show a direction of travel, demonstrating a firm belief in the stability of the market – including capital values and wages –as a whole.
Following the BoE’s February base rate cut of 0.25% to 4.5%, traders in swap markets appear to expect two similar base rate cuts this year, though few still anticipate a third. Given this and that lenders currently face unusually narrow margins against their cost of funds, our view is that while mortgage rates are clearly on a downward trend, the path is set to be gradual in the extreme.
For independent mortgage advice, contact Private Finance on 0800 980 8777 or at jacksonstops@privatefinance.co.uk.
BIG PICTURE
Pressure for new housing plus policy changes to farm subsidies and taxes, have generated more uses and demand for land, than ever. The question we are asked, though, is always the same:
What is land worth?
Above and Inset: Cheshire £3,350,000 guide, 20 acres (Chester)
Among the things money can buy, land is special. Unlike, say, cars or jewellery, it grants security and monopoly control over a unique part of that which our world is, and which supports and connects us all. What we do on, and to, land we own, affects our environment and neighbours of today, and of future generations.
This is why, from an economic standpoint, land values often make little sense. It is why agricultural rental yields average 1% or less, why one Cotswold client recently paid £200,000 to extend their garden and why, if you have a large area of woodland to sell, the most profitable route might be to sell multiple lots with covenants preventing development. Here, we take a broad look at the land market, the growing range of land uses –and how much buyers actually pay.
FARMLAND: LOW PROFITS & RENTS, HIGH CAPITAL VALUES
The UK is a little over 95,000 square miles of land. Of that, just 7% is urban and 52% is “enclosed farmland” 1. Currently, farming is extraordinarily unprofitable. Average net income per farm last year increased to £10,600 and 30% of farming businesses lose money. Farmland rents average just £88 per acre 2, yet the same land sells for a hundred times as much. Such differentials only make sense in the light of the special nature of land and, some argue, the value of farmland subsidies and tax advantages. In the many instances where much higher figures are achieved, it is because the potential exists either for the conversion of existing buildings, or for a different kind of use.
Right: Devon
£1,250,000 guide, 7 acres (Exeter)
DIVERSIFICATION YIELDS HIGHER VALUES
Incentivised for decades to diversify, UK farming has been successful in creating –or at least embracing – new markets and commercial reasons to buy land. The potential value to buyers in such markets thus needs to be considered. They include:
l Leisure: wedding venues, camping sites, ‘farm experience’ holidays, adventure parks and wildlife tours.
l Countryside stewardship: payments for carbon sequestration, biodiversity and flood control schemes (often coupled with leisure uses).
l Exotic crops for a warmer climate: farmers in East Anglia (which is especially dry) are experimenting now with fields of miscanthus grass (for bioenergy) and olive groves. By 2080, they expect to be growing oranges 3
l Renewable Energy: A 20 acre, 1MW wind farm can pay a guaranteed rent of £10,000 per year (£500 per acre) for a decade or more, while allowing continued
use for farming. Similarly, ‘agrovoltaics’ is currently attracting much interest. This combines arable farming with higher, more widely-spaced solar panels to harvest power and protect crops from excessively strong sunlight.
WOODLANDS
The market in woodlands for private enjoyment was given a strong boost by the Covid pandemic. Buyers want quiet, beauty, a stream and enough flat ground for a picnic and a tent. At an average of around £12,000 an acre and over £20,000 for the best plots, such demand can transform hilly woodland from Cinderella status to match top agricultural values. To achieve this, it can help to split the woodland up (three to seven acres is most popular) and impose restrictions –designed to ‘run’ in subsequent sales – within the sale contract. These add value by ensuring that owners and their neighbours all know that they have all agreed not to, for example, use guns, race motor vehicles, run a commercial campsite, or build permanent property.
£3,950,000 guide, 7 acres (Chelmsford)
Sources: 1 ONS
2 DEFRA / Gov.uk
3 University of East Anglia
Left: Essex
Top: Sussex
£3,600,00 guide, 44 acres (Mid Sussex)
Below: Somerset
excess £2,500,000, 16 acres (Taunton)
DEVELOPMENT LAND: REAL VALUE, HOPE VALUE AND CONTROL
Land in development zones has clear value as a plot: the valuer’s job is to identify the most valuable solution for which permission is likely to be granted and work the numbers back. Planning and professional fees often amount to 15% - 20% of the build cost.
Taking such factors into account, an acre plot for, say, four £800,000, 4 bed houses, tends to be worth around £500,000 and, across most of the country, sales of larger areas of land with residential permission fall within a range of £350,000 to £700,000 per acre.
The picture is very different for land lying just outside development zones. Here, we get into the realm of hope value, options (see page 9) and, above all, control. Within villages, we are seeing more deals like the Cotswold one mentioned earlier, which involve homeowners paying a premium for adjacent land despite little chance of it ever being developed, or
even used for commercial ‘glamping’ by rowdy holidaymakers. But, having the money to make sure, neighbours buy the peace of mind that control, brings.
HOUSES WITH LAND: PRIVACY AND LEISURE
In the mainstream family house market, a very large garden can deter as well as attract. Further upmarket though, homes with many acres are actively sought by equestrian buyers and those wanting privacy, control and beautiful gardens. Even then, for a small estate with two houses plus stables, such as the Cheshire house on page 12, some will consider its surrounding dozen or so acres to be ample. Thus its additional barn and land of some 10 acres, is offered separately and, having significant ‘hope value’, is likely to achieve in excess of £75,000 per acre. As ever though, the answer to ‘What is it worth?’ will only be proven, when it is sold.
Benet Brandreth is a barrister, an expert on rhetoric and Shakespeare’s use of language, a performer and, occasionally, an actor. He is also the author of two novels which speculate on William Shakespeare’s younger days, The Spy of Venice and The Assassin of Verona.
PROPERTY EXPERTS SINCE 1910
HOME
MY HOME IS A TEMPLE
By Benet Brandreth KC
Home – it’s where the heart is, where everybody knows your name, where the wi-fi connects automatically. From the sublime to the ridiculous the common theme is not possession, not comfort but connection. Think of it in those terms and home is no longer simply where you lay your head but where you feel, most keenly, the links to history and to other people.
I have had the same professional home for all my working life, Middle Temple. One of the four Inns of Court; the ancient institutions responsible for the training of barristers. My own Inn, Middle Temple – so called because it is the middle part of the old estates of the Knights Templar just outside the walls of the City of London – is both the most magnificent and the most welcoming. Its centrepiece is the Great Hall completed in 1573. A touch of the Renaissance hidden behind Fleet Street and the Strand. You will have seen it without knowing so because it features so often as the backdrop to period film and television shows. Its sixteenth century charms belie the fact that it is still the fully functioning base for hundreds of barristers, solicitors and clerks.
It’s here that I feel most at home. It’s a lonely business being a barrister; in the end it is you, on your own, standing up before the judge or the jury, making the case. So to be surrounded by a group of people who know that experience themselves, its stresses and strains but also its thrills and triumphs, is both relief and pleasure. The Hall is where we gather, hearts uplifting at sight of the splendours of artistic craftsmanship intricately carved into its doors. Sensing the golden thread of history, we gaze at the hundreds of armorial panels that decorate its walls. It was here that Shakespeare first performed Twelfth Night, here that Raleigh raised the funds for his voyages to the New World, here that countless barristers have learned the law. Since the beginning, however, Middle Temple has understood it was more than just a place of learning but also one of connections, a home for all its members. At the grand dinners that still fill the Hall with conversation and laughter, the evening ends with the echo of three toasts: to the King, to Absent Members, and the last is simply to the Latin word for home – Domus.
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