West Country Special: Holiday letting
8th June 2011
With house prices in seaside towns rising dramatically and good rental income almost guaranteed, buying a holiday home is an increasingly popular way to make money, says Graham Norwood.
By Graham Norwood
If you thought Britain’s housing market was stagnant, think again. Cornwall shows that one type of property investment is in rude health.
Lettings firms say the staycation, where people holiday in the UK rather than overseas, has created high demand in tourist honeypots. The West Country appears to be the area of Britain benefiting most from the trend, with Cornwall attracting the lion’s share of business.
Eagle-eyed buyers have been snapping up cottages, some at bargain prices, to exploit this growth sector.
“Demand for our holiday lets by visitors is up. We get most of our visitors from London and the South East, sometimes from the Midlands, but also from elsewhere in the West Country, such as Devon and Somerset,” explains Jenny Harris, property manager of St Aubyn Estates, a lettings firm based in the cobbled seaside town of Marazion, south-west Cornwall.
Holiday-home owners with properties in this attractive part of the county – Marazion’s causeway leads to the lovely granite and slate island known as St Michael’s Mount – are sitting pretty.
“People are booking later than ever before, because of uncertainty over jobs, but the end result is that bookings are very strong. Even local people, from north Cornwall, for example, are renting our holiday homes,” says Jenny.
Gaynor Jehu, a physiotherapist from Exeter, bought a dilapidated fisherman’s cottage in St Ives in 2002 for £200,000. Now it is worth double that, and booked by tourists for every week until October.
“It has what people want – two bedrooms, character, a sea view and two parking spaces. And it’s in the centre of the town, so it’s close to everything,” she says. “I pay 21 per cent commission to a lettings agent, which is steep, but this means I have all the management issues taken away from me. By the end of next year, I hope the bookings will allow me to pay off the mortgage for the cottage.
Increasingly, other investors want to emulate Gaynor and buy a cottage to let.
“Since April’s Bank Holidays and heatwave, interest has picked up rapidly,” explains Nicola Oddy of Stacks Property Search, a buying agency. She says many clients are those who would previously have bought overseas. Now, thanks to budget constraints and deterred by events such as ash clouds, they want something more convenient.
“Key requirements for holiday-home purchasers are location – in or near a recognised holiday destination – and privacy. Purchasers always want property that isn’t overlooked,” says Nicola.
Letting your holiday home can be such a lucrative business, you might even be tempted to give up the day job. In Padstow, the most sought-after rental location on the north Cornwall coast, a three-bedroom cottage will fetch £675 a week in off-season and up to £1,700 in the summer. On the south coast, in a less well-known location such as Cawsand, the price range is £400 to £950 for the same size property.
Inland, a three-bedroom Bodmin Moor cottage, located perfectly for walking or as a base to explore the county, will be £450 in the low season and £800 in the peak summer period.
Prospects are good, too. House prices in seaside towns in England and Wales have risen by 128 per cent since 2001, with the biggest increases in Wadebridge, Cornwall, where prices have tripled in a decade.
Another attraction has been Cornwall’s improved infrastructure. The A30 running through the county has had most of its bottlenecks removed. The blossoming Newquay airport now has direct flights to Ireland and Germany, as well as many UK destinations. And the overnight sleeper train from London has seen a renaissance.
So with a hot summer in prospect, which locations offer the best value family bolt-holes that could also be let out to what the indigenous Cornish call Grockles? Local housing experts say the best value is found in the least well-known places.
“Try Trelights – halfway between Port Isaac and Rock – or Manaccan, by Helford. These are beautiful villages, a short car journey from some of Cornwall’s premier activities and are excellent value for money,” says Ben Standed, of Jackson-Stops & Staff, in Truro. Expect to pay £300,000 to £400,000 for a good-quality cottage in these locations.
“Kingsand and Cawsand are in what’s known as Cornwall’s forgotten corner, as it’s untouched and not at all commercial. It’s in an Area of Outstanding Natural Beauty, steeped in history,” says Sandy Lush, of estate agency Marchand Petit. For £225,000 you can buy a lovely cottage in this area of south-east Cornwall, a short drive from the ferry across the Tamar into Devon.
“Parts of the Lizard Peninsula and Roseland Peninsula [also on the south coast] look good value for money for such beautiful areas. The Lizard is well supported by the towns of Helston, and Roseland by Truro. Both have good access to unspoilt beaches and estuaries for boating,” says Jonathan Cunliffe, of Savills’ Cornish office.
The Lizard is also the choice of Prime Purchase, another buying agency working with purchasers seeking a Cornish getaway. “Its fantastic climate offers better value for money to those prepared to travel that bit further. You could pay up to 20 per cent less for a holiday home here, when compared to the most fashionable locations on the north coast.”
Those northern hot spots – Padstow, Rock and Newquay, made famous by an irresistible mix of surfing, sunshine and celebrity chefs, including Rick Stein and Jamie Oliver – fetch top dollar as a result. Some small cottages with harbour or sea views in Padstow have hit half a million pounds, while Rock has many homes with seven-figure price tags.
Newquay is cheaper (and has many empty new-build homes awaiting buyers), but period homes on the outskirts sell like the hot saffron cakes which can be found in the local bakeries.
“There are very few bargains to be had [in north Cornwall], particularly in the character-cottage sector. Our Padstow and Rock offices have more than 90 per cent of out-of-county buyers. North Cornwall has proved very popular with people from Surrey and south-west London,” says Jeff Cole, of Cole Rayment & White estate agency.
But one of the very best locations in Cornwall is also one of the farthest. Penzance, 300 miles and a five-hour train journey from London, has some truly beautiful properties. Cottages come in at well under £250,000, while a town house, capable of hosting five or six paying guests as a holiday let, is yours for £350,000.
Little wonder that people are choosing all parts of Cornwall over farther-flung foreign holiday home areas. And there are other considerations that make Cornwall such an attractive place to buy property, as construction consultant Adrian Lamb, his wife Tammy Kenyon and their seven children, aged 12 to 27, know very well. They own a home in France but did not visit it at all last year. Instead they made monthly pilgrimages to their Cornish cottage in the quiet backwater of Cawsand.
“It has direct access to the sea, I can fish off my balcony and catch bass, pollock and dogfish. The kids can safely be in the street at midnight.
“It’s like being in another country,” says Adrian, whose journey from his main home in the Lake District takes five hours door-to-door.
Our age of austerity may be taking its toll on some parts of the property market, but for Cornwall’s holiday lettings sector, the clouds of the downturn have a particularly shiny silver lining.
Source: Telegraph 8/6/11