By Tyler Durden
Following trends in New York City, San Francisco, Los Angeles, and Chicago, wealthy so-called ‘Down-from-London’ers have reassessed their living situation in urban areas and moved to the countryside due to the virus pandemic.
Bloomberg reports Londoners who generally have a large house in the London metro area and a cottage in the suburbs have flipped tradition upside down, with their principal residence now in the country, opting for a smaller flat in the city. They also said, “the global rich triggered a 1,900% sales surge for UK country estates this year.”
Crispin Holborow, country director of Savills’s Private Office, said exits to the countryside are due in part to strict virus lockdowns. He said a “staggering” 19 country estates (with values over £15 million) in the UK have sold or are under contract in 2020, as the previous year only five sold.
Holborow said the countryside marketplace for estates was in a “rut” for years – adding that the virus pandemic, with the flood of people exiting metro areas, brought new life to rural communities.
A recent real estate report via Knight Frank showed UK country houses in the £2 million to £10 million range saw sluggish growth over the years. By the end of 3Q19, the market for these homes had seen five consecutive quarters of price declines – with country house prices about 20% below their 2008 peak.
According to a separate Knight Frank report, between May 13 to June 24, the number of accepted offers for country houses with values between £5 million and £10 million jumped 182% higher than the five-year average. Prices for these homes soared 64% higher than the same five-year average.
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Edward Rook, head of the country department at Knight Frank, said country homes, once considered secondary homes for the wealthy, are becoming primary homes, and buyers are pouring in.
“A lot of people are making [country houses] their primary home. Instead of having a large house in London and maybe a cottage in the country, they’re reversing that and having a smaller apartment in London and a principal residence in the country,” Rook said.
He said that during summer lockdown, “it was quite a sobering feeling, where you’re sitting in your lateral flat, in air conditioning, and you’re looking at your friends sitting in glorious sunshine on Instagram.”
“These are normally people who would jump on their plane and go,” he said, adding that lockdowns and closed borders limited mobility, and many of these wealthy folks would instead get stuck at their estate on the country as opposed to flat in the metro.
A revival of rural real markets is underway on both sides of the Atlantic. With lockdowns present in the UK and the US metros reimposing stricter social distancing measures to mitigate virus spreading, another round of wealthy city dwellers could be preparing to head for a new life in rural communities as they have the ability to remote work.
Source: Zero Hedge
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