It is no secret the English countryside has seen a surge in activity the past year, fueled by the stamp duty holiday and the desire to escape locked-down cities. While that has already supported prices, they could still have some room to run—at least in a few particularly picturesque areas.
England is considering deeming four new regions Areas of Outstanding Natural Beauty, or AONBs, which means they would be designated for conservation due to their landscape value. The proposed regions include the Yorkshire Wolds, Cheshire Sandstone Ridge, and extensions to the Surrey Hills AONB and Chilterns AONB.
Natural England, the government body that oversees the AONBs, says it will begin considering the designation of the four areas during this financial year. That will require evidence gathering and engagement and consultation with communities and stakeholders. Each designation could take two to three years, and then a minister would need to confirm the designation.
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Real estate in existing AONBs tends to sell at a significant premium, according to data from multiple estate agencies. The new designations could boost property prices as well.
Purchasing a property in an AONB may not make the most sense for investors seeking rental income or looking to renovate and flip homes. But for London families wanting to escape from the city and looking for some classic English country charm, now might be a good time to buy in one of the newly proposed areas.
Escape to the Country
The U.K. real estate market has broken record after record lately, and much of the activity is taking place in the countryside.
“We have just seen this incredible demand for space and greenery,” said Chris Druce, a senior research analyst at Knight Frank.
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With many employers adopting hybrid work models—which allow staff to work from home part-time—the traditional commuter belt is being stretched.
“The way modern work is changing, and this change in attitudes that people have had, means that [moving to the country] probably makes more sense as a lifestyle decision now, and also something that you might consider as an investment,” Mr. Druce said. “There has probably never been a better time to live in the country, if it suits your lifestyle, so we are seeing a lot of underlying demand for this.”
Then there has been the added momentum of the stamp duty holiday, announced last year and extended this year through the end of June, and then tapered until September. It suspended transfer taxes on home purchases of up to £500,000 (US$689,700).
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“So you had these two factors—the pandemic, which turned everything upside down, with people spending a lot of time in their homes with time to think about what kind of lifestyle they wanted—and then the extra emphasis of the stamp duty holiday, which distorted the market hugely this year,” Mr. Druce said. “We have never seen anything like it, and the net result is a lot of people that were planning to move out of cities have moved up their plans.”
A recent University of Exeter study found that spending at least two hours a week in nature was associated with good health and well-being.
“Part of [the draw of] an Area of Outstanding Natural Beauty is lifestyle,” said Simon Ashwell, Savills’s head of residential sales in Surrey. “It is a beautiful environment, a protected lifestyle, with woodland you can walk your dog in, or nice fields around—that’s why people move there.”
Many of those looking to buy in areas such as Chilterns and the Surrey Hills are families moving out of London, he said. It takes 35 minutes to travel from London’s Marylebone Station to Amersham, on the edge of Chilterns AONB, by train. BoxHill & Westhumble station in Surrey Hills AONB is reachable from London’s Waterloo Station in 1 hour and 18 minutes by train.
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Other potential buyers include people who already live in the area, but no longer need to commute into the city as often and have decided to move a bit further out.
There are also wealthy retirees looking to downsize.
“Protected houses have not been massively extended,” said Mr. Ashwell. That makes places like the Surrey Hills AONB a logical place to retire to the country without entirely giving up London life.
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‘The Whimsical British Feel’
“With Areas of Outstanding Natural Beauty, it is not surprising that to be right in the heart of what is currently what people absolutely want will cost you a premium,” Mr. Druce said.
According to data from Knight Frank, the price of a detached house in an existing AONB is 32.7% higher on average than a similar property within five kilometers (3.1 miles) of the boundary. By Savills’s calculation, the premium is 56.6% compared to county averages.
Detached houses within the existing Surrey Hills AONB currently cost on average 32.4% more than similar properties just outside, according to Knight Frank; in the Chilterns the premium is 23.5%. Even wider price gaps can be found in other existing AONBs, such as Gower (79%), Norfolk Coast (70.1%), and South Devon (63.2%).
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“Obviously in some of these new areas, we would expect the premium to increase once they are established,” Mr. Druce said.
AONBs are known for their quaint villages as much as their scenic natural landscapes. Picture the 2006 movie “The Holiday,” which was shot in Godalming and Shere, a village in the Surrey Hills AONB.
“AONBs are really popular because it protects an area, so it means when you buy into it, it is pretty much going to stay the place you bought into,” said Savills’s Mr. Ashwell.
He highlighted the land shortage for housing in the U.K., where local authorities are often on the lookout for places to build, causing concern in villages.
“If it becomes an AONB, it is much more protected,” he said. “It also keeps the character around you—the whimsical British feel.”
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‘A Double-Edged Sword’
While the data suggests that properties in soon-to-be AONBs stand to appreciate in value, not all agents agree.
“I think Areas of Outstanding Natural Beauty in their entirety are a slight double-edged sword,” said Kate Eales, head of regional residential agency at Strutt & Parker. “It’s great to be in one because they are protected and obviously a beautiful, sought-after place to be, but if you are in an AONB, you are subjected to regulations on planning and what you do to properties.”
She pointed to the village of Evenlode, just outside of the Cotswolds AONB, which has the look and feel of the protected area without being subject to the same restrictions.
“In terms of value,” she said, “you are buying in a place which is beautiful and protected, but you have to weigh that up against the value you could have added if you weren’t in one of those areas, in terms of improvements.”
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Meanwhile, she said, many areas surrounding AONBs offer similar benefits to what their more-expensive neighbors offer—especially in terms of access to nature and tranquility.
“People have changed their lifestyles over the last 17 months,” she said. “I think people are reevaluating what they want out of their home and therefore all these areas will become more popular.”
Mr. Druce echoed that sentiment.
“If the question is whether to buy in the heart of one of these areas or somewhere located near it, both areas will see prices increase,” he said. “Whether you are in an AONB or just outside, the lifestyle that is giving you is lots of space and lots of greenery.”
Jason Corbett, director of country sales and lettings at Sotheby’s International Realty U.K., agreed that in designating the newly proposed areas as AONBs there might be a case for restricting building or extensions on properties—which he said could actually drive prices up, as there might be fewer new properties available.
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“But it may also drive the market down, as people shy away from areas harder to work with,” he said, adding that there will likely be more visitors to the areas once they are designated, which could affect their current beauty.
For his part, Mr. Ashwell did not expect the building limitations within AONBs to negatively affect prices.
“I think most people buying into these areas are buying in because of what that area offers and are not going to change it massively,” he said.
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Future-Proofing
Ms. Eales cited the age-old adage that real estate prices tend to come down to “location, location, location.”
“You have got to be in a location that is accessible to what you need—schools, shops, et cetera—but also the house has got to work,” she said. “It has got to be suitable and future-proofed, because it is expensive to move.”
Many of the houses in the newly named regions are likely to have already been extended and modernized, as they are not yet in a protected area. So buyers could certainly find “future-proofed” homes, or renovate them themselves before the AONB designations come into effect.
In that case, Ms. Eales said, “buy the house.”
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