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February 25,2008
 A decade or so ago, owning two cars was a sign you had made it. Today, it is two homes. From Rock in Cornwall to Robin Hood’s Bay in North Yorkshire, and Southwold in Suffolk to Snow-donia in north Wales, holiday homes have been one the biggest beneficiaries of Britain’s housing boom, with prices in some of the most beautiful – and accessible – spots rising by far more than in the country as whole.
Estimates for just how many people own a place by the seaside or a bolt hole in the countryside vary widely: the latest government figures put it at 240,000, but Savills estate agency estimates it could be as many as 365,000. In north Cornwall, the hottest of holiday hot spots, prices in the five areas with the highest levels of second-home ownership have risen by 351% in the past 10 years, the agency says. Prices in the county as a whole have grown by a more modest 253% in the same period.
With the broader housing market wobbling, where does this leave the second-home sector? Will this be the year to snap up that bargain holiday home? The answer, inevitably, depends on where you are looking and what you want. “The top end is swimming along as usual,” says Lucian Cook, director of research at Savills. “If there is a scarcity of houses, prices will remain strong. The house that features on the postcards will always sell well.”
In other words, if you think you will get that five-bedroom seafront villa in the South Hams, Devon, or that period manor house in the Cotswolds for a knockdown price, then think again. Look lower down the price scale, however, and there may be some bargains out there. Although agencies in the most popular holiday spots are not reporting forced sales, there are indications that some potential buyers are doing their sums and holding back: with credit tight and rising utility and council-tax bills cutting into disposable income, a second mortgage is not top of everyone’s wish list at present.
“The sub-£500,000 market could see lots more properties put up for sale as buyers look to free up capital,” Cook says. “There will also be less competition for such properties. It will be easier, but that doesn’t meant to say it will be easy.”
The changes to capital gains tax due to come into force in April may also have an impact – although this, too, is difficult to predict. The cut in the rate from a maximum 40% to 18% levied on the profits from second-home sales could persuade some owners to sell up and cash in their profits. And, provided they satisfy certain criteria, those who rent out their homes will pay only 10% on the first £1m of gains, thanks to a U-turn, announced last month by the chancellor of the exchequer, Alistair Darling.
So, whether you want a weekend bolt hole, a holiday home for the family by the seaside or simply to try out country life on a part-time basis, here’s our guide to what is happening to prices and what properties are on offer.
The southwestThe sandy beaches, rugged cliffs and top-notch sailing have long attracted urbanites down the A303 (or, increasingly, into their private planes), making the West Country one of the most desirable and expensive places to buy a second home. That does not look likely to change much this year.
“Rock is as crazy as always, although people are spreading out towards Padstow and Constantine,” says Sandy Davenport, head of the waterfront division of Knight Frank in Exeter. “People are paying big prices. If you want to be on the water anywhere on a Cornish estuary or the South Hams, you have to be prepared to dig deep.”
However, her colleague, William Morrison, who heads the office, says the market for properties below £600,000 is “stickier”. “It is a buyers’ market,” he says. “Six months ago, it wasn’t.” Dorset, with its chocolate-box cottages and Miami-style pads along the seafront in Poole, shows the same patchy performance across price brackets.
East Anglia
Second-home buyers have long been drawn to the Norfolk and Suffolk coast. Holiday cottages are still in demand, and January saw record sales in some spots. As with the property market as a whole, those who do not need to sell are not putting their home on the market, and properties that are up for sale are taking longer to go under offer.
In the Georgian hot spots of Southwold and Aldeburgh, you can buy a fisherman’s cottage or 200-year-old three-bed house for £450,000 – about the same price as they were last year, according to Adrian Smith, a director of Jennie Jones estate agency in Southwold. Prices along the rugged north Norfolk coast, from Cromer to Hunstanton, have also stabilised. “Prices went up dramatically here over the past few years, but have slowed down a bit,” says Philip Macdonald, managing director of Abbotts in Bury St Edmunds.
The south
Prices on the Isle of Wight, a half-hour ferry ride across the Solent and Queen Victoria’s favoured location for a second home, are stable or falling. “The days of ‘it’s worth £100,000, let’s try for £115,000’ are gone,” says Greg Lewis, office manager of the Bem-bridge branch of Creasey Biles & King. “Properties on for £600,000 last year will still be on for £600,000 now.”
Mark Astley, a partner with Jackson-Stops & Staff in Chichester, West Sussex, where it is possible to pick up a cottage for £450,000 to £500,000, says the market there is holding up – but sellers are having to be more realistic. “If a house is priced sensibly, it stands as good a chance of selling now as it did last year, but there is no room for overpricing,” he says. “There are no great reductions, yet.”
The Cotswolds
Full of manor houses, picturesque villages and market towns, this swathe of countryside stretching from Bath to Stratford-upon-Avon has become a prime weekend destination for the smart set, and interest – for now, at least – remains strong. “The number of inquiries is higher this year than last year,” says Sam Butler, a partner at Butler Sherborn, a local agency. “That said, there’s a lot of toe-dipping going on without a huge number of actual sales. Prices are holding up, but everything takes longer.”
Ed Sugden, a director of Property Vision, a buying agency, nevertheless believes the market for weekend cottages in the area has fallen flat: “Your standard not-so-special village house has probably dropped 5% to 10%.”
The Lake District, Yorkshire Dales and Northumberland
The traditional spots of Windermere and Ambleside in the Lakes, and properties in the national park, are behaving much as they always have done: rising steadily and remaining relatively expensive compared to much of the local housing stock. “We’re a long way from London,” says Nick Miller, managing director of Eden estate agents in Penrith. “Prices have been steady since 2004. Buyers come from all over the country – I can’t see it changing.”
It is a similar story in Alnwick, Northumberland, and the towns of Scarborough – Britain’s first seaside resort – Robin Hood’s Bay and Whitby, in North Yorkshire. “There’s no evidence of a slowdown so far,” says Laura Noble, a negotiator in the Whitby office of Reeds Rains. “Half-term has been busy, and we have had lots of interest in the small cottages under £200,000 that second-home owners look for.”
Up in the border town of Berwick-upon-Tweed, however, prices have taken a knock. Andrew Aitchison, director of Michael Aitchison Property Services, says anything above £250,000 has slowed dramatically. “The market for second homes under £200,000 is still strong, but they are taking longer to sell. People are pulling the purse strings in a bit.”
Wales
The principality gained a reputation for being a cheap Cornwall, until prices took off dramatically five years ago. Pretty, period properties with sea views in the Gower peninsula, northern Pembrokeshire, Ceredigion and the northwest coast have all registered double-digit growth. But here, too, things are starting to calm down.
“We had a phenomenal couple of years,” say Neil Evans, a director of West Wales Properties in Haverford-west. “But now prices are beginning to flatten out and in some cases fall. It’s likely to stay that way for most of the year.”
Source: http://property.timesonline.co.uk/ |
