Catherine Penman, head of research, Carter Jonas, commented:
“Whilst global economic uncertainties undoubtedly continue, farmhouse availability across the UK is likely to be exceeded by demand, at least in the first part of the year. The recent increase in VAT to 20% is expected to have a minimal impact on the market, although the increase in Stamp Duty Land Tax in April 2011 from 4% to 5% for properties valued over £1 million is expected to have a more pronounced effect.
“A clear regional disparity has emerged over the final quarter of 2010.
“The Southern region continues to lead the rankings in terms of valuations, with the market continuing to be driven by the London market. In addition, the City is expected to produce a rich source of country house buyers for the New Year. Demand across our network of offices is resilient with stock levels continuing to remain low. Winchester has proved increasingly popular amongst London buyers, particularly since the area to the east of the city became part of the South Downs National Park. The pricing bracket of farmhouses across the region continues to tighten, with Newbury standing at £2.35 million, Winchester and Andover at £2.25 million and Basingstoke at £2 million.
“Valuations across the Eastern region have held firm over the fourth quarter of 2010. A two-tier market has emerged as the shortage of good properties available ensures a typical farmhouse in a commutable location attracts very strong interest. A number of cash buyers are evident and increasing proportions are now going to the extremes of digging out ‘discreet’ or ‘pre market’ properties.
“As a consequence, the valuation of the theoretical farmhouse in our Suffolk office rose by 4% over the quarter to stand at £1.4 million, with the other office valuations within the region remaining stable.
“In contrast to the general theme, the Northern and Western regions have proved more susceptible to the ongoing cautionary note evident across the general housing market. A general decline in interest levels has been witnessed, due in part to the run up to Christmas. Significantly a noticeable slip in asking and offer prices was registered throughout the region during December. Stock levels will be crucial in 2011; if they continue to remain low, prices are forecast to remain stable although if an increase is noted, prices may well slip further.
Our office in Kendal was the only office within our Northern region to witness a stabilisation in pricing over the last quarter, as the market continues to be insulated due to the National Park and its unique positioning.
“The Central region continued to hold firm in terms of valuations and overall sentiment, with good quality stock selling well. Stock levels are expected to remain low, therefore prospects for 2011 remain generally positive.
“However, the market is not immune to the wider housing market and remains finely balanced. Any change in interest rate levels may well place a different complexion on the market. The availability of top quality product is likely to remain relatively low moving into the Spring, resulting in informed purchasers responding rapidly to opportunities in prime locations with realistic and feasible offers.”