Hotspots turn not-spots as the rural housing market cools

Home sellers in parts of the countryside right now are having to work harder to find a buyer than in previous years. While rural home sales boomed during the pandemic — the prices of country houses with an average value of at least £2mn soared by 10.4 per cent in the year to September 2021, according to Savills estate agency — they have come up against the harsh reality of higher mortgage rates and the bursting of the work-from-home bubble.

James and Samantha were typical of the buyers who rushed out of London to move to the countryside in the early years of Covid, buying a beautiful Georgian house on the edge of a village in deepest Somerset. “It was a wreck and so became a huge lockdown project and a labour of love,” says James, who did not want to give his real name.

He and Samantha now need to be in the capital most weekdays for work. “The commute — which is over 2 hours 30 minutes each way — has just become too painful,” he says. They are now putting the house, which is still not completely finished, on the market, with the aim of buying a smaller home in Somerset and a flat in London.

Some of these now-rueful rural dwellers who have changed their minds face tough conditions when it comes to selling. Property prices in prime regional markets fell by 6 per cent between the disastrous “mini” Budget in September 2022 that triggered the upward march in mortgage rates and the end of last year.

The commute — which is over 2 hours 30 minutes each way — has just become too painful

“These markets saw more significant falls [than city locations] as buyers focused more on the practicalities of commuting and limited how much debt they were prepared to take on,” says Lucian Cook, head of residential research at Savills. “However, while there is still downward pressure on larger properties in more rural areas, the rate of price adjustments has slowed significantly.”

Some of the areas experiencing the biggest reality check are those that were most overheated during the pandemic, with vast price inflation, bidding wars and gazumping, especially among second-home buyers. Properties in the seaside town of Swanage, in Dorset, are currently taking an average of 136 days to find a buyer, 83 days longer than this time last year, making it the slowest market in the country, according to the Rightmove property portal. St Ives, in Cornwall, a key Covid hotspot, is the second slowest, with homes taking 129 days to sell, 34 days longer than in 2023.

“Unless it is an incredibly rare house, such as one right on the coast or one that’s considered the best of the best, with no defects or in the perfect location, many properties in Cornwall are going for below the asking price — there are discounts of as much as 10 per cent in some areas,” says Joanna Ireland, founder of the buying agency Relocate To Cornwall. 

Yet the cooling of the Cornish property market isn’t easing the area’s housing crisis or making life any easier for locals. “We are struggling to buy a bigger home right now,” says Emma, who didn’t wish to disclose her real name. She is leaving the north Cornwall coastal village of St Agnes, where she grew up and has lived all her life, to buy in more affordable Hayle, in the west of the county.

“Property prices in Cornwall are still high following the Covid frenzy, interest rates are high and wages haven’t risen,” she says.

Estate agents say that homes farther from London, or from good transport links and amenities, have also struggled to sell since workers have been required to be in the office more.

In Norfolk, for instance, only 33 per cent of homes for sale are under offer or sold subject to contract, according to the analyst PropCast, while counties surrounding the capital are faring better: in Berkshire, 48 per cent of homes on the market have found a buyer, while in Surrey, the figure is 47 per cent. 

“People aren’t working from home as often as they had hoped so although they still want to move to the country for lifestyle and family reasons, the commute and the proximity to the train station are crucial, as is being in a thriving village with a good community,” says Amanda Ake, regional director at Stacks Property Search.

Some country areas have nevertheless bucked the trend. Prices in Rutland, England’s smallest county, have risen by 6.5 per cent over the past year to an average of £393,750, meaning they are now 28 per cent higher than in 2019, according to analysis of Office for National Statistics data by Hamptons estate agency. 

Londoners are still moving to Rutland because they can get more for their money than in places such as the Cotswolds, according to David Crooke, managing director of Pelham James estate agency. “The private schools of Oakham and Uppingham, as well as nearby Stamford and Oundle, are also big draws,” he says. “While more homes have started to come on to the market, there is still a lack of good period and new homes for sale.”

Despite high prices, the Cotswolds are also faring well, with values in West Oxfordshire up 4.7 per cent over the past year, according to Hamptons. “It’s not quick to commute to London, but the Cotswolds are something of a micro market and have their own big lifestyle draws, such as Daylesford Organic and Soho Farmhouse,” says Phillippa Dalby-Welsh, head of the Savills country department. 

We are struggling to buy a bigger home right now. Property prices in Cornwall are still high following the Covid frenzy, interest rates are high and wages haven’t risen

Venues such as Estelle Manor and the Bull pub in Charlbury are also helping to draw those who want “urban luxuries but in a rural setting”, according to Harry Gladwin, partner at buying agency The Buying Solution. He says he has seen a 50 per cent increase in US buyers in the Cotswolds compared with this time last year.

The falling inflation rate and the prospect of Bank of England rate cuts lead some agents to say the outlook is brightening. According to Savills, the volume of sales agreed on country houses is 24 per cent higher in the first quarter of this year than the same period in 2023.

However, owners of rural homes — which have risen in value by 23 per cent over the past five years, compared with 17 per cent for those in predominantly urban areas, according to Nationwide building society — need to get the asking price right. “Sellers need to remain realistic if they are to take advantage of improving market conditions to secure a sale and move home in 2024,” says Richard Donnell, Zoopla’s executive director of research.

More choice of homes is nevertheless prompting some buyers to pounce. David had been looking to move to Wiltshire with his young family for some time and found a pretty farmhouse priced at £3.5mn that had struggled to sell last year. In January, the estate agent put it back on the market and David, who did not want to give his full name, decided to go ahead — as did another buyer. 

“The house also ticks all our boxes: it’s in a thriving village and close to a train station for commuting — it even has a swimming pool,” David says. “We ended up paying £3.5mn because we felt the market was bottoming out and now was the time to make the leap.”

On the market

Cottage, Oxfordshire, £1.75mn
A newly renovated, five-bedroom cottage believed to date from the 17th century in the Cotswold village of Sarsden, close to Daylesford Farm and Soho Farmhouse, on the market with The Country House Department.

House, Berkshire, £3mn
A six-bedroom Georgian property in the village of Chieveley. The gardens, which were designed by an RHS Chelsea gold medallist, include a pool and a summer house. For sale through Hamptons.

Estate, East Sussex, £4.25mn
A 13.6-acre estate near the village of Ticehurst, in East Sussex, including a six-bedroom house and two cottages. Available through Knight Frank.

Grade II*-listed house, Wiltshire, £8mn
A William and Mary manor house with 12 bedrooms, a separate cottage, a swimming pool, a tennis court and stables. The 53-acre property is on the Somerset border, 5 miles from Frome. Listed with Strutt & Parker.

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