OLD MONEY RIVALS NEW

Simon Courtauld on

the rocky market in country estates

A GLANCE at the house advertisements in recent issues of Country Life might lead one to think that the lights on the big estates are going out all over southern England. 'Who wants the bother of a country estate?' The line from Frank Sinat- ra's and Celeste Holm's rumbustious song in High Society came to mind as I looked at the details of several 'substantial' houses on the market at prices between £2 million and £6 million.

Of course most estate agents wouldn't dream of admitting that the present situa- tion is anything exceptional. In this cli- mate, they will tell you, it's just that properties are taking a bit longer to shift, and some people are reluctant to reduce their asking prices to realistic levels. 'Realistic' is a currently useful estate agent's word, meaning, in effect, a price around 20 per cent below what was being paid, no less realistically, in the boom period of 1987-88. One agent, however, did admit last week that he had never known so many 'top estates' on the mar- ket. What, then, is going on? Auberon Waugh has written that when a great nobleman dies we are all diminished. It is tempting to entertain similarly gloomy thoughts at the demise of a great inherited estate which has proved too bothersome or expensive to maintain. Certainly it is true that many family seats have been sold and broken up in recent years; at least three are on the market at present — Viscount Exmouth's Canonteign in Devon, Lord Glendyne's Hurdcott, near Salisbury, and Donnington Grove, James Gladstone's ex- quisite Strawberry Hill Gothic house near Newbury in Berkshire. But the present proliferation of large estates for sale has, in fact, more to do with new money than old.

Two now on the market in Hampshire, Longparish and Lockerley Hall, are owned by Property developers who have over- developed; the house, like the business, is debt-financed, and in these tricky times assets have to be realised. Here is the Principal difference between this rarefied sector of the market and us ordinary mortals. Where a large estate is financed by a loan secured against a business asset or the shares of a company which has failed

to achieve its projected profits, it may have to be sold, at the behest of the bank. This is in contrast to the smaller houses and flats which are financed by solid, friendly mort- gages of up to 30 years, and are now in noticeably short supply. Agricultural land is another problem with these large properties. Whereas a new squire may be happy to take on 50 or so acres of 'amenity' land, for a bit of shoot- ing and protection from his neighbours, a few hundred acres are less attractive. Farmland in real terms has fallen in value by about four times over the past decade; and with moderate yields in the last two dry summers and the threat of reduced subsidies from Brussels, it is unlikely to improve in the immediate future.

So if business debts are largely responsi- ble for all these unwanted estates on the market, who is buying them? Not the Americans, who are deterred at present by the strength of the pound, which has increased in value against the dollar by 20 per cent since May. There is evidence that French and Germans, expanding their business enterprises in Britain, are buying country houses here, but not the grander estates. One would expect Gulf Arabs to be increasing their British property port- folios but, in the light of the present crisis have three — no, to hell with it, four times my own body weight.' with Iraq, they may not wish to disclose what they are doing with their inflated oil revenues.

Prince Khalid Abdulla of Saudi Arabia was reported the other day to be the buyer of Glympton in Oxfordshire from the once wealthy, and now hugely indebted, Austra- lian entrepreneur, Alan Bond. This was later strenuously denied, and in the gossipy estate agents' world the purchaser is being kept an unusually well-guarded secret. All that is known is that Glympton was sold to a Jersey company, possibly sheltering another Saudi Arabian, for about £11 million, or 20 per cent less than Bond paid for it two years ago.

Then there is the Peter de Savary factor: this egregious entrepreneur's changing of his various properties bears some resembl- ance to the barmaid's knickers. At least it keeps the estate agents in business — he has recently bought Skibo Castle in Scot- land; he is selling Glenborrodale Castle, a house in Cornwall, and Littlecote, his 14th-century Tudor pile near Hungerford.

De Savary is more of a trader than a seller, rather more an example of the smart, cash-rich new money which, in a few recent instances, has paid big prices for country estates. But the most interesting feature of this market is the evidence that the old money is buying back.

Lord Biddulph's grouse moors in the Lammermuirs, which were offered for sale in the spring following his death, were bought for £4.75 million, not by an Arab or a German as had been expected — but by the 37-year-old Duke of Northumberland. In some recent cases, too, large private houses have reverted to family ownership after many years. Duncombe Park in Yorkshire and Farleigh House in Hamp- shire are now occupied again by Lord Feversham and Lord Portsmouth, whose families had sold them to be used as schools.

This welcome return of the aristocracy to their, or someone else's, estates is partly attributable, no doubt, to the better reg- ulation of their financial affairs after years of failing to do enough to minimise the burden of death duties. But the principal reason is surely that, since the bad old days of the last Labour government, the tax on investment income has been cut by more than 50 per cent — which has made a vast difference to the fortunes of the landed gentry, and particularly to those with tenanted farmland. Another old family seat now for sale, Wardour Castle in

Wiltshire, which has been the home of Cranbourne Chase girls' school for the past three decades, sadly cannot return to the Arundells who once owned it, as the title died out in 1944.

Much as one may wish that a large estate will remain in, or revert to, private own- ership, a more fashionable fate for these properties has been conversion to a hotel. Thirty bedrooms are today thought to be the minimum economical number for a hotel, and there are not many such houses. So planning permission is sought, and frequently granted, for an annexe or exten- sion, which is almost certain to be an eyesore, and for 'leisure facilities' in the landscaped park, which inevitably will include a golf course. (The nightmarish prospect of the remaining countryside being littered with sandpits and coloured flags looms ever closer.) In the current economic climate, howev- er, the future of these country house hotels is not encouraging. How many people can go on spending £120 a night? And how many companies will be prepared to go on using them for their business entertaining? Though not exactly a hotel, Chandlings Manor near Oxford is a good example of the sort of place which can easily become overextended. Having started life as a Cotswold stone farmhouse, it is now an elaborate 'leisure complex' — with casino, jacuzzis, games rooms, cinema and suites of huge, overdecorated rooms. With 60 acres, the Lebanese who built the place failed to sell it for £5.4 million in April to a leisure company, and it is now in the hands of receivers who are asking £3.5 million. The agents describe Chandlings as 'one of the most spectacular properties in the south of England', which is not a bad joke. `Absurd' is a word which springs more readily to mind.

No doubt there will always be a demand for the genuinely spectacular property, such as the Compton Manor estate in Hampshire which used to belong to Sir Thomas Sopwith and is now to be run by an American group selling hugely expen- sive sporting weekends with fishing on the Test and big-bag shooting. But it would not be surprising to see more country hotels, and houses bought for hotel conversion, back on the market in the near future.

Is it too much to hope that some of them will — like the schools — be returned to private ownership? Those incurable optim- ists, the estate' agents, are this week convincing themselves — and, perhaps, some of their tax-wise 'old money' clients who, far from going into hibernation, may be stirring in the autumn sunshine — that, with interest rates on the way down, now is the time to buy. So why shouldn't it be the time for a return to the family roots?

It will take two years to get any neces- sary planning consents and do the altera- tions and renovations. By that time, of course, the Conservatives will have won the general election, interest rates will be falling, the stock market will be rising, the recession will have passed, inflation will be negligible — and everything in the restored walled garden will be lovely. Ask any estate agent.