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New media money is looking for a place in the country
Demand from the nouveau riche in the media and technology industries is stoking a boom in the price of stately homes and large country houses on the fringes of London, according to estate agency Savills.
The boost to London house prices generated by the City's annual bonus round is now beginning to spread out of town to areas such as the M40 corridor.
Aubrey Adams, the chief executive of Savills, said: "City bonuses always knock straight through to property inquiries in London.
"But we are beginning to see a new impact on out of town property, which is partly the well-off looking for country homes but also a surge in demand from people working in the new media sectors just outside London."
He said that the price of the most popular country houses now ranged between £600,000 and £2m. He predicted that prices in this sector would soar by 18% this year. That compares with the 13.5% rise in the price of mainstream and central London houses which Savills sees for 2000.
Mr Adams said that the increasing trend towards internet and tele-working was likely to deflect some of the house price pressure away from London and towards the regions.
He expects local "hot spots" to be created throughout the country with hugely expensive houses standing cheek by jowl with much poorer housing, although the shortage of space in the south east is expected to ensure there is no let up in de mand and no long-term decrease in prices.
Savills, which yesterday unveiled a 69% rise in interim profits to £8.8m, is now in talks with more than 20 other central London estate agencies to set up a jointly owned website to ensure their business is not poached by internet newcomers. Mr Adams said there are plans for the big property-owning institutions in London to pool their property and market it on the web.
The boom means Savills is now likely to top last year's £18.5m bonus payment to staff, which meant windfalls of between £1,000 and £600,000 a head for its 1,200 employees.
Even its agricultural business division, which is one of the largest land managers in the country, is managing to stave off the threat of collapsing prices thanks to demand from City and internet millionaires.
Mr Adams said that although farm incomes have been "massacred", the impact on land values has been only slight.
"New wealth is buying land because these people want land for leisure purposes or to have around their large country homes," he said. "So although people are pulling out of farming and there is little volume of land sales, the prices are holding up."