Supply building outside of London ahead of spring market
With supply tight, some sellers will look to capitalise by listing early.
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It was a vintage 12 months for the country house market in 2021, with the strongest price growth recorded since the global financial crisis and the most exchanges in a calendar year for the past 15 years.
The number of exchanges was up 26% compared with 2020, and by 40% compared to 2019, the year before the pandemic and successive lockdowns brought space and greenery to the top of buyers’ wish lists.
“We saw unprecedented levels of activity in 2021 as people renewed their love affair with the British countryside,” said Ed Rook, head of the Country department at Knight Frank.
“Thanks to the rollout of broadband and the growth of home delivery it’s no longer the case that you have to live in an urban area to be connected, which has made country property an increasingly attractive asset,” Ed said.
However, with new prospective buyers up 39% in 2021 versus the five year-average and new instructions for sale down 13% in the same period, the shelves often felt empty as supply failed to keep pace with demand.
Indeed, total available property for sale in the country was 34% down in December 2021 compared with December 2020.
Meanwhile, demand remains high despite a backdrop of increasing inflation, Omicron and the prospect of climbing interest rates. The number of new prospective buyers in December 2021 was up by 35% versus the five-year average.
There are increasing signs that sellers, some put off by a lack of purchase options last year in a frenzied market during the stamp duty holiday, are looking to sell in 2022. The number of market valuation appraisals, a leading indicator of supply, was at its highest for a decade at the end of 2021 (see chart).
While the picture around new instructions remains difficult to call at present, for those that do go early, research shows January is one of the best months to sell in as demand peaks and competition isn’t as strong.
“My advice is that any prospective downsizers may never see better market conditions in their lifetime. For those considering selling, now is the moment,” added Ed.
The average price of a property in the country market increased by 10.6% in the 12 months to December 2021, representing the strongest period of annual growth since 2007 and the global financial crisis.
As supply builds, we would expect this to exert downwards pressure on prices.
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