Agents warn of a bubble in frenzied country property market led by fleeing Londoners

Linda J. Dodson

Coronavirus has brought a dramatic change. Fiona Pengelly of Strutt & Parker estate agents in Salisbury said: “Since the market reopened, I have sold a third of our stock off market in excess of guide price.”

One property listed for £2m sold for £200,000 over asking; another buyer offered to pay an extra £100,000 for a property listed for £2.25m after a single viewing because they knew another buyer was booked in for a second viewing, said Ms Pengelly.

“It simply can’t carry on at this exponential level,” she added.

Lockdown has made Londoners reassess where they want to live, she said, adding that most of her buyers are what she described as “Covid refugees”. “People don’t want to get on the Tube, they would rather walk across the lawn to their home office.”

In April, 15pc of all buyers registering with Countrywide estate agents across the country were from London, up from 8pc in March. In April 2008, the proportion was just 4pc. 

These fleeing Londoners are focusing their attention on the south of England, where they accounted for 19pc of buyer registrations in the first five months of the year, a jump of six percentage points from the previous high in 2017.

Agents are sceptical about whether the momentum can continue. “There is going to be a bubble I think,” said Ms Simpson. “The general feeling is this frenzy will peter out in the autumn, and come October anyone who is not sorted will batten down the hatches.”

While this group of buyers may be largely immune to the effects of rising unemployment and the end of the Government’s furlough scheme, country buyers’ wealth is often closely tied to the stock market, which could fluctuate heavily, said Ms Simpson.

Many of these buyers are also becoming increasingly restricted by changes in lending, as many banks will no longer consider variable incomes such as bonuses in mortgage calculations, said Mr Harvey. He argued that there will be a “big fall through rate” of agreed sales that will collapse before they complete.

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