Wetherell

Caroline McGhie

We are entering uncharted territory in this slump. Some of the country's smartest estate agents are now landing multimillion-pound properties to sell on the orders of receivers. There is no more forgiveness at the top end of the market than at the bottom. Wetherells, for instance, now has four hefty receivership sales priced at between £1.85m and £5m in the heart of London's Mayfair.

"The bigger they rise, the bigger they fall," says Peter Wetherell, managing director. Many more receivership sales are in the pipeline, with the result that agents are spending their time at "beauty parades" pitching to handle the fallout from the recession.

Here we find the leftovers of the Noughties boom with its taste for rich living. First up on Wetherells' books is a spectacular duplex top floor flat on Upper Grosvenor Street, Mayfair, with a fabulous roof terrace, double reception room, views across the rooftops of London, four double bedrooms, a key-operated lift and service charges of almost £11,500 a year. This is priced at £5m but it is difficult to set a value because the market is in such a state of paralysis.

Also fresh from the receivers is another duplex in Mayfair, in Green Street. It lies in one of those red brick late-Victorian houses, later turned into flats, that symbolise solidity and reliability. It has three bedrooms, a maid's room with a shower, service charges of almost £9,500 a year and a price tag of £3.75m. And there is a second-floor apartment in Ryder Street off St James's, in a period building with two bedrooms, comfort cooling, underfloor heating, caretaker, lift and an asking price of £2.65m.

A two-bedroom flat close in Davies Mews with a private roof terrace at £1.85m makes up the fourth. All are open to offers through Wetherells, who believe there are plenty of people who will buy once the price is right. "We currently have offers of £80m on London properties which have not been accepted, mostly on townhouses where the owners are hoping for more," says Peter. He says there are foreign buyers cruising Mayfair "waiting to swoop" when the market has reached the bottom. "But you never know when you have reached it." More multimillion-pound properties will be shed before the gloom lifts.

"People positioned themselves to take a lot of business risks in the boom and took care to shield personal possessions," says Liam Bailey, head of residential research at Knight Frank. "But there are those who took bigger risks and mortgaged their houses to grow their businesses. And inevitably some of these gambles are going wrong. It is the end of the longest and biggest boom we have ever had. Prices have dropped around 18 per cent since the peak in March 2007." And how much further do we have to go? "The drop will probably stop at 30 per cent." Funds and institutions are desperate to get into the London market, maybe in the second quarter of next year. Individuals are waiting until the pound is at its weakest and the market is at the bottom.

Home-buying agents County Homesearch hope the dollar will bring buyers out into the open. As sterling has dropped by 28 per cent since November 2007 and house prices by 20 per cent, those with dollars can effectively buy at a discount of over 40 per cent, advises managing director Jonathan Haward.

About 110,000 insolvencies were declared last year, many more are expected at the beginning of this year and business failures are up 40 per cent. Around the country the remnants of grandiose schemes and vast ambition are evident in the houses given up. They encompass all the rags-to-riches drama of a Dickens novel.

Near Nottingham, Clifton Hall is a house of immense grandeur, with 52 rooms, ornate plaster ceilings, hand-painted walls, a soaring octagonal hall where statues of Diana, Neptune, Bacchus and Apollo nestle in niches in the walls. It sits on a cliff overlooking a great sweep of the River Trent, has 17 bedrooms, 10 bathrooms and domestic offices. Sadly, the rooms are now empty, the glamour has leaked away and a 24-hour guard protects it. The price set by Knight Frank is £2.75m – not high because there are many grand houses in the Midlands that are quietly looking for new owners.

The West Country has been particularly badly hit, says Bruce Tolmie-Thomson at Knight Frank, though he has managed a successful sale of Gurrow Point, a country house with nearly 78 acres on the River Dart. He priced it at £4.5m but, like Wetherells,was unsure because there were not enough recent sales on which to base a valuation.

He is handling another receivership sale at Ashurst in Sussex, of Eatons Farm, a pretty farmhouse with barns, cottages and 74 acres, priced at £3.8m. The rural idyll has come to nought. "Some are people who have upsized who are now in deep water, those who wanted the champagne lifestyle but didn't have the money to match," says Bruce.

Please click here to view the original article published by the Telegraph, January 13th 2009.