My Own Gosford Park

The remnants of Empire… Fire Sale!

We are looking to buy a country home.

Originally, we were looking in the Hamptons, on Long Island, along with everyone else from Manhattan. But of late we have started looking in the Cotswolds, in England.

When you factor in the traffic on the Long Island Expressway, it doesn’t take that much longer to fly to Heathrow than it does to drive to East Hampton on a weekend.

The amazing thing about buying real estate in England, (at least country houses) is what you get for your money.

What might buy you a modest 5-bedroom summer house in the Hamptons with pool on about 1 acre of  land or less, buys you a massive, rambling pile of stones and a landed estate in England that looks like it was dropped out of Gosford Park.

The Hamptons house comes with a media system.  The house in Stow-on-the-Wold comes with a barn, stables, a caretaker’s cottage, a massive main house with fireplaces you can walk into, endless miles of rooms, servant’s quarters, as well as a pool and tennis court, and about 35 acres of trees, streams, fields and God only knows what else.

And when you start to look for country houses to buy in England, there is no shortage of supply. In fact, it’s almost endless. And while they are not giving them away…yet, there is a real glut on the market of massive estates and country manors.

Where did they all come from?

For nearly 300 years, Britain ran the world.

As late as 1914, Britain was the world’s leading banker.  The British owned nearly half the wealth in the world.  No other nation has before or since owned and controlled so much of the planet.  Britain ruled one-fourth of the planet’s land surface and one-fourth of the planet’s inhabitants.

Remarkably, Britain was able to achieve and hold onto this massive measure of wealth at relatively little cost.

In 1898, arguably the height of the Empire, Britain spent a total of 2.5% of the GNP on defense (or as the British would say, defence). That is, interestingly, the same percentage of GNP that they spend today on defense.  But then it was to hold and rule a global empire.

The vast, almost incalculable amounts of money flowing into the British Isles fueled a 300 year long expansion that would make the dot-com boom seem like a rounding error.  It was that wealth that in turn led to a massive building boom.  The great manor houses and estates of the Cotswolds, and the rest of rural England are the by-product of that 3 centuries long growth.

The party ended in 1945.

The Second World War bankrupted the Empire and the UK underwent what was probably the fastest and most precipitous financial decline in history.

Today, a vast inventory of magnificent country homes and estates bears silent witness to what was once the world’s greatest financial power.

How fast things can change.

My Manhattan apartment overlooks Fifth Avenue.

As I look out of my living room window, the landscape is filled with the product of 70 years of America’s domination of the world. (Although ironically nowhere near the size of Britain’s at the height of the Empire).

The buildings are our own monuments to our own commercial power and prowess.  666 Fifth Avenue (the one just to the right), sold last year for a mind-boggling $1.8 billion. For one office building.

But now, as The New York Times reported yesterday, the Manhattan commercial real estate market is deeply depressed.  Many buildings sit vacant.  The Times reported this morning that the apartment market is no better, with prices down as much as 40% over the past two years.

I have no doubt that when the great stone piles I am looking at were built in the Cotswolds by then-captains of industry, they must have believed that their power and dominance would go on forever.

Looking out the window this morning, and reading The Times, I cannot help but wonder if Fifth Avenue is not the Cotswolds of the future.

I wonder if in the not-too-distant future, boatloads of Chinese entrepreneurs will start to descend on Manhattan, kick the tires, and write home about the fantastic real estate bargains that are to be had in the US.

Nothing lasts forever.

And, like climate change apparently, fiscal change can come down with blinding speed.