New Homes: Barn conversions – the best of all worlds?
PROPERTY'S
“ BLIND WATCHMAKER ”
Has technology been in the driving seat, all along?
UK MARKET REVIEW NUMBER 55
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.
Left: Suffolk £1,495,000 guide (Bury St Edmunds)
Front cover: Lancashire £2,500,000 guide (Alderley Edge)
Below: Essex £2,500,000 guide (Colchester)
RESEARCH
Property’s “Blind Watchmaker”
Has technology been in the driving seat, all along?
One recent academic report¹ on the psychology of buying and selling property found that householders typically suffer from an “illusion of control” over what buyers will pay. Another² argues strongly that control lies not with Adam Smith’s invisible hand of the market, but with technologies of typically unpredictable impact. They are launched with no more vision of where they will take us, than has evolution – Richard Dawkins’ ‘blind watchmaker’ – of how it will shape the natural world. Specifically, the argument is put that the property boom and bust of c. 1998 - 2008, was a direct consequence of rapid growth in online property listings and mortgage application systems, during that
period. Technology, the research paper argues, opened up and sped up the market as never before, pushing up sales, prices and mass ‘irrational exuberance’ (more psychology), leading to overshoot and crash. Leaving aside the role of credit relaxation in that particular cycle, the broader truth about the role of technology starts to look obvious when one considers other instances: commuter suburbs, for example, only became possible with the advent of railways. Rather more recently, 370,000 homes in England have been transferred from housing to holiday use since 2009, because that is when Airbnb launched³. In a change unforeseen by UK policy makers, Airbnb technology and that of its subsequent
online rivals now handles a number of holiday homes equivalent to roughly 10% of the country’s shortfall in places to live. Meanwhile, amid the continuing hype around the latest shiny technology (artificial intelligence) feedback from our offices around the country, supported by formal research, suggests that the impact of one technologyenabled phenomenon is, if anything, being under-stated. Having been anticipated and hoped for, for some time, flexible hybrid working is, for those in a position to benefit, now having a visibly positive effect on family and community life. In doing so, it has created a marked shift in what and where
buyers of country houses, want to buy. While fully remote working remains rare, 40% of the UK workforce now has some capacity to work from home⁴. Amongst Jackson-Stops buyers of working age, that figure is much higher. Working one or two days each week from home, along with flexible practices such as starting work at home and travelling an hour or two later, is the norm. A welcome perk for some, enabling them to avoid rush hour crushes and peak train fares, for those with young children and commitments to community groups, it is proving to be an enormous boon. As the graph below demonstrates, there is
Above: West Sussex
£3,950,000 guide (Mid Sussex)
Right: Surrey
£2,750,000 guide (Oxted)
INDICATORS OF THE IMPACT OF WORKING FROM HOME ON DEMAND AND QUALITY OF LIFE WE ASKED THREE QUESTIONS OF EACH OF OUR COUNTRY HOUSE OFFICES
Sources
1 Marney, J.-P. and Fakhry, B. (2024). A review of the behavioural factors influencing the housing market | Journal of Economic and Social Thought. Issue 1 vol. 11.
2 Walters ET (2024). The 3 Decades Global Financial Policy Failure in Housing Market. European Journal of Accounting, Auditing and Finance Research Vol.12, No. 5, pp.,62-81, 2024
3 Cromarty H (2024) The growth in short-term lettings in England (House of Commons Library)
4 Office for National Statistics
5 Nationwide House Price Index / Tori B. (2024) The Impact of Remote Work on UK Property Values and Demand (Birmingham City University).
great confidence that the beneficial effects of hybrid working are real and growing. This is most clearly evident where our buyers are predominantly commuters. Remarkable, too, is the high proportion of couples requiring an office each. This affects demand, especially as those who often work from home prefer an office that is at least a little separate from the house; in an annexe or garden room, say, rather than a converted bedroom.
IMPACT ON DEMAND AND VALUES
Our figures and other reports indicate strongly that the effects of hybrid, flexible working include:
l Higher demand for larger homes with separate offices. Immediately post-Covid, the prices of larger homes grew more than twice as much as smaller houses⁵. Prices have since fallen back, but the demand differential remains.
l Higher demand further from train stations, because buyers commuting less frequently, value extra house and garden space, over a very short drive to the station.
l Higher demand beyond traditional commuter belts, as those attending in person less often, accept journeys of two hours or more in favour of better value.
THE NEXT TECHNOLOGY?
Though some larger employers of office staff are pushing for full in-person attendance, they are in a clear minority. Hybrid working
appears to be one benefit unavailable to earlier generations, which those working now, can enjoy and are determined to retain.
Looking ahead, where might other new technologies lead us, blindly or otherwise?
AI promises to accelerate existing trends towards remote working and ‘smart’ buildings and neighbourhoods, without obviously creating new ones. It is hard to predict change, because potential is rarely fulfilled. Zoom launched in 2013, after other sharing technologies such as Apple’s iCloud (2011) and Dropbox (2008). Yet without the globally simultaneous impact of the pandemic, working from home would probably still be waiting for wide acceptance.
Today, electric bikes can negate the obstacle of minor landscape undulations, making neighbourhoods designed around cycling, which are common in the Low Countries, practical here. Major gains, too, have been made in building-specific systems for solar energy, water collection and treatment, and hydroponic horticulture. Together, these hold the potential for super-eco apartment buildings, self-sufficient in energy, water and even, to some extent, food. Ultimately though, regardless of their intended purpose or potential, the use or neglect of such technologies will depend upon action, public or private. Evolution needs no consent, but technology, does. Collectively, we are in the driving seat.
LONDON MARKET COMMENT
London’s prime agent
Leading the way with local expertise and professionalism.
Following a thriving summer market, the autumn months present an exciting opportunity for sellers and landlords. Demand to live in the city remains at an all-time high as the ultimate destination to live, work and invest.
The London network of offices covers some of the most sought-after areas, including Mayfair, Pimlico, Teddington, Wimbledon and Weybridge. Harry Buchanan, Pimlico Sales Director, adds, “The popularity of these towns makes them much more resilient to external influences, with values continuing to
grow. The sales market has been particularly busy with mortgage rates stabilising and more flexible lending criteria, resulting in sellers and buyers wanting to press on with their moves. In the last three months, our transactions have increased by 20 per cent compared to last year. We provide our clients with a clear marketing strategy tailored to their needs, which allows us to achieve the best possible price, often leading to multiple offers.”
John Williams, Weybridge Sales Director, has been experiencing similar trends across his prime area of Surrey. “We are seeing renewed
Above: Pimlico
£2,500,000 guide (Pimlico & Westminster)
Right: Walton-onThames
£1,750,000 guide (Weybridge)
Below: Wimbledon
£13,000 pm (£3,000 pw) (Wimbledon)
confidence in our buyers, particularly those purchasing larger homes in excess of £2 million. We recently sold a home in the prestigious location of St. Georges Hill. Within one week, we secured six offers and achieved over the asking price for our delighted seller. A shared database, proactive approach, and experienced local experts ensure that we exceed the expectations of our clients.”
Buyers are not limited in their choices, and property is readily available; comparatively, the lack of rental properties across London creates a fiercely competitive market. Natalie Platanias, Teddington Lettings Director, explains, “With
an influx of enquiries, not only do we want to achieve the best possible price, but we also support our landlords by finding first-rate tenants, often from professional or corporate backgrounds. The rental experience is further enhanced by our proactive property managers, who are always on hand and never more than 15 minutes away from your property, reducing issues in the long term. This is why over 70 per cent choose to renew their contracts with us.”
Jackson-Stops regularly deals with the top end of the market due to its Corporate and International Relocation team. Amelia Redington, Wimbledon Lettings Director, explains, “There is a huge
demand for large family houses, with tenants most recently coming from Korea, Norway, and the United States, with budgets exceeding £5,000 per week. We work very closely with large corporations and embassies, many of whom partner with us exclusively and appreciate our discreet approach.”
Jackson-Stops are proud to be recognised by their customers and clients, through the thousands of Google reviews rating their service 4.9 out of 5. The London housing market remains strong, with many opportunities across the city, and we are here to support our clients on their property journey.
£15,000 pm (£3,462 pw) (Weybridge)
Above: Hampton Hill £1,200,000 guide (Teddington)
Left: Leatherhead
NEW HOMES & DEVELOPMENTS
Ready to convert, newly-converted or newly-built: there is a barn you'd love to call home.
Above: Ready to convert Worcestershire
£600,000 guide (Chipping Campden)
Inset: Suffolk £300,000 guide (Ipswich)
In many parts of the country, old agricultural barns are found not in isolated fields, but right in the centre of small rural villages. Consequently, those who buy former barns to convert and live in, often weren’t looking for either a self-build project or a new property: they just wanted a
big, characterful house with plenty of neighbours. Doesn’t the prospect of the conversion process deter all but the bravest buyers? Not if certain guardrails are in place, as Annabel Wakley, director at Chipping Campden, explains: “The trick is to take out the bulk of the uncertainty, in advance.”
Together, Annabel says, planning permission (where needed), a thorough survey, a credible quote from an experienced building company and a dash of local gossip, eliminate the bulk of the “known unknowns”, broadening the appeal of an unconverted barn to a far wider
market. Reductions in running costs of big barn spaces, thanks to innovations such as ultra-efficient renewable energy systems and insulating glass, have widened the appeal still further, as has the more enlightened attitude of many planning departments
towards enclosing connecting spaces between the main building and former outhouses. These have helped to address occasional compromises which arise in relation to adapting spaces to different uses.
NEWLY-CONVERTED BARNS
Brand new, completed conversions can’t have the bespoke touches that become possible when you, the buyer, are the developer, but they do have all of the other advantages –and you can have them, now. A good new barn conversion thus holds enormous appeal, having ‘all mod cons’ and bags of character.
REPLACEMENT BARNS
SELF EMPLOYED Q4 DECLARATION GAP
At this time of year, mortgage applicants who are self-employed – including sole traders, partners and private company owner-directors – often fall foul of a cyclical mis-match. HMRC does not require last year’s (2023/2024) tax returns to be submitted until 31st January 2025. However, as evidence of earnings, most lenders require tax returns which are less than 18 months old.
Thus, from October, this rules out returns from the previous year (i.e. 2022/23 in the current instance). To avoid this, selfemployed mortgage applicants should, ideally, submit their tax returns early. If this is not possible, loans will still be available, but from a much smaller pool of potential lenders.
SUB 4%, 2 YR FIXED: LOSS LEADER OR SMART BET?
Surpassing our expectations for 2024, the first two year fixed mortgage rate under 4% has returned to the residential market. We didn't anticipate two year fixed rates this low, this soon, especially given the minimal profitability involved when compared against current cost of funds.
More often outside centres of population, we are seeing an increasing number of brand new houses which look remarkably like barn conversions, but which in fact have replaced a more recently built (usually 20th century) barn. Spectacularly spacious, these impressive houses might lack some of the gentle charm of converted traditional buildings, but there isn’t a compromise in sight.
After factoring in all the costs with setting up the mortgage, there is little to no profit for lenders to offer this level of rate for a two year product when compared to the current cost of funds. The lender appears to be accepting a near-zero margin to capture market share.
At first glance, the sustainability of this strategy looks questionable. It makes a lot more sense if part of a broader bet on interest rates coming down faster than expected.
For independent mortgage advice, contact Private Finance on 0800 980 8777 or at jackson-stops@privatefinance.co.uk.
COUNTRY MARKET COMMENT
Strengthening fundamentals
Surge in buyers as affordability slowly improves.
In the first quarter of the year, we said in this publication that, irrespective of short-term fluctuations, market conditions were such that underlying capital values would continue to grow. This has proved to be the case. At the time of writing, and despite concerns about the potential impact of tax changes, those fundamentals look even stronger. This point is underlined by our monthly inhouse statistics, all of which, year-on-year, are again in positive territory (see graph), most remarkably so in relation to demand which, as measured by new applicants, is up 31%.
INCREASES ACROSS THE BOARD
MONTHLY SALES ACTIVITY, YEAR-ON-YEAR
August September
Left: Somerset
£2,200,000 guide (Sherborne)
£2,250,000 guide (Yorkshire)
Far Right: Northamptonshire
£2,300,000 guide (Northampton)
This is unusual and a little counter-intuitive: what prompts an increase in buyers and sellers? The answer appears to be: confidence in the stability of interest rates, in the economy and in values.
Few are expecting impressive economic growth or a return to sub - 3% mortgages. Even so, confidence in stability and asset values is such that, at the time of writing, Sterling has only come off a two-year high against the US dollar on expectations of faster interest rate cuts, vindicating the launch by lender Nationwide, of a 95%, six-times salary mortgage, with interest fixed for at
least five years at below 5%. This is a big bet on interest rates getting lower, house prices higher and stable employment. Given the overall shortage of supply, stability alone has proved sufficient to generate a broad and welcome surge in activity, across the country house market as a whole.
PRICING, SELECTION AND LEGAL OBSTACLES
Though the big picture is positive, the detail is often more challenging. Faced, in most regions, with a better choice, buyers are quick to query prices yet even quicker to
Right: Essex, excess £2,000,000 (Chelmsford)
Right: County Durham
reject properties which need significant work. Misleading ‘armchair valuations’ via Zoopla etc, don’t help, as Mark Astley, director at Chichester explains: “Online services estimate value based on past prices and subsequent inflation. Value-adding improvements such as extensions and renovations are not factored in, nor is the unique nature of a typical country house. Part of our job is to make sure buyers can fully appreciate what is on offer.”
Mark also feels strongly that buyers often don’t even see properties they might love, because of the strict nature of online filtering: “Country houses often have idiosyncratic spaces and features that don’t fit the filters, which also say nothing about the neighbourhood. Applicants who give us some detail about their hopes and lifestyles make it much easier for us to identify potentially ideal houses which might otherwise slip through the net of automated filtering.”
Meanwhile, bemusement remains at the frequency of delays and errors within the conveyancing process, particularly as the old adage of getting what you pay for, no longer so obviously applies. Lancashire director Karl Ormerod echoes a sentiment voiced by many: “From ‘factory’ conveyancing agents and well respected law firms alike, we’ve seen terrific service and terrible service, often making the difference between a deal going through and not. I urge all of our clients to choose their conveyancers with great care.”
RENTAL REFORM:
DON’T HOLD YOUR BREATH
There is so much detail to sort out within the proposed rental reform legislation, revised and expanded by the Labour government, that its impact when in place is beyond helpful speculation here. As anticipated, the government has already played down
Above: Devon
£2,250,000 guide (Barnstaple)
Below: Gloucestershire
£1,095,000 (Cheltenham)
Above: Kent
£1,650,000 guide (Cranbrook)
Below: West Sussex
£1,950,000 guide (Midhurst)
pre-election statements about banning so-called ‘no fault’ Section 21 evictions “immediately”, saying now that it hopes to have such a ban in place “by next summer”. We suspect that is optimistic. In the meantime, we have no doubt that, even though the proposed reform contains little that we expect to significantly affect our landlord clients, rising concern about potential legislation and taxation is behind a continued reduction in properties coming to the market and further losses to the holiday market mentioned on page 3. This is exacerbating the painful shortage of homes to let and consequent increase in rents, of which tenants are only too aware.
HISTORIC APPEAL
It is a little early to be citing this as a clear trend but, after many years of buyer caution or outright rejection of country houses with
more obvious architecturally significant, historic appeal, the tide might be turning. At the top end in particular, the sheer physical ‘rootedness’ and charm of a locally important, architecturally resplendent house with a big history, contrasts so strongly with the glass, marble and steel of modern ‘Grand Designs’ type houses as to provide a welcome change and relief. For those seeking a larger, more rural base for both work and family (‘ WFH ’ rearing its head yet again) the attraction is notably strong. Almost all such houses are Grade II Listed, but more buyers appear ready to accept this and, indeed, embrace the spirit of conservation which listing codifies. This suggests a confidence in the future and even a desire to contribute to it, by preserving aspects of the past. Either way, historic houses are the heart of this country’s rural heritage. To see them become highly fashionable once more, would be of great cultural benefit.
Former Editor-in-Chief of British Vogue for 25 years, Alexandra's career encompasses writing for the Tatler, The Sunday Telegraph (Women's Page Editor) and GQ (first female editor). She now writes for The Daily Mail. Currently also Vice President of The London Library, Alexandra has published four books, including her memoir.
PROPERTY EXPERTS SINCE 1910
HOME
ESCAPE FROM INSECURITY
Alexandra Shulman CBE
Unlike many people I lived in the same family home throughout my childhood until the age of 23. But although there was the wonderful continuity and familiarity of this home – the same books in the same place on the shelves, the same black and white floor tiles of the kitchen, the same cobalt blue curtains in the study –it was never a place in which I felt entirely secure.
Home was a central London flat rented by my parents. The alltoo-real tension surrounding the annual rent rise and the issue of whether they would be able to afford it was, I now realise, one of the most influential aspects of my childhood.
Desperately keen to escape such anxiety and insecurity about where home would be, I was hugely motivated to buy somewhere of my own. A place, as they say, that not only could I call home, but a home that I owned. And so, as soon as I could afford to buy somewhere I did, at the age of 27, with help from a Nat West bank manager who loaned me the deposit. My first flat at the less salubrious end of Ladbroke Grove cost £45,000, which was three times my annual
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salary (those were the days). It was a mousehole with the No. 52 bus stop literally four feet from my bedroom window but – it was my mousehole.
As a result of that first buy, and several upgrades later, each moving me a few miles further away from the central London area where I grew up, I now own a beautiful home, across from a delightful park. I don’t undervalue how lucky I am to have the pleasure and security of such a home at a time when so many can’t afford to either buy or rent, and others still are homeless. It is where I have brought up my now adult son and a house which my very extended family uses as a base. It’s a home that hosts frequent parties, ranging from a friend’s 80th in our garden last year, to my step-daughter’s wedding lunch this May. It’s where the paintings I have collected hang on the walls, where books collect in every corner and to where our cat comes home, always returning after patrolling the local gardens. It’s the place I always look forward to returning to, with a welcome sense of belonging flooding in, as soon as I open the front door.
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