Uncertainty around Brexit means some buyers are choosing Devon over the Côte d’Azur
While estate agents just about everywhere in the UK are sweating over Brexit uncertainty and a looming downturn, a rare few on the Pembrokeshire coast think it’s boom time.
“It’s as if a plague of locusts has descended since autumn, buying up every good coastal property,” says Carol Peett, a buying agent at West Wales Property Finders. “We saw more inquiries from people wanting to buy holiday homes, mostly with a budget of £400,000-£500,000, in the first three weeks of January than we’d normally expect in a year.” Properties in popular areas such as Manorbier and Bosherston have regularly gone to bidding wars.
It’s a similar story in Devon, where Sarah-Jane Bingham-Chick, head of residential for Savills estate agency in Exeter, reports her office’s best-ever start to a year. “We just sold a £3m house to someone who was intending to buy in the Côte d’Azur, but then spent a week in the South Hams during last year’s hot summer and has bought in Devon instead. This month alone, we have agreed sales on three coastal homes, all on the River Dart, before even launching them to market.”
So what’s causing all the fuss? One reason is the huge demand for staycations — and staycation rentals. If you weren’t googling your UK holiday let for this summer right after clearing away the Christmas turkey, you may already be too late.
On a dreary Sunday last month, Sykes Cottages, a holiday rentals company that lists more than 4,000 homes, took 2,519 bookings — that’s 10,000 holidaymakers in total — representing a 36% increase on bookings on the same Sunday year on year. The two most popular properties have been a Welsh boathouse and a woodland cottage in the Highlands.
“A quarter of the Brits we polled said Brexit will encourage them to holiday in the UK this year,” says Graham Donoghue, the firm’s chief executive. “The increased costs of international travel and the prospect of another heatwave could tempt more people than ever to stay in Britain.”
The luxury specialist Oliver’s Travels has seen a 21% rise in searches for UK properties in the past three months, compared with the same period last year; figures for France fell by 12%, Italy by 45% and Greece by 67%.
“People are searching for party houses in the UK,” says Oliver Bell, the company’s co-founder. “Some of our repeat customers who always book Portugal have switched to the UK this year for the first time.”
At another holiday-let firm, Mulberry Cottages, 2018 ended with a 30% rise in bookings for this summer, compared with the same time the previous year. Large family bookings for 10 or more people are a notable trend, and the Cotswolds has seen the biggest growth in demand.
Pet-friendly properties, hot tubs and a pub within walking distance all rank high on holidaymakers’ wish lists. Tiny cottages are also big this year: “Perhaps it’s the romance,” says Rowena Owen, operations director for Mulberry Cottages. “It’s becoming more mainstream to book a holiday let for a couple instead of a hotel room.”
Take the Cider Shed, a small but dreamily isolated barn on the Laurie Lee Wildlife Way, in the Cotswolds. The owner, Sophie George, began letting it through Mulberry Cottages last February and it is fully booked until May. “It’s usually a spur-of-the-moment weekend getaway for couples and their dog, who come from all over the UK, so it’s unusual to have bookings months in advance,” she says.
This Easter also promises to be a busy time for holiday rentals. Some schools break up for the Easter holidays on that all-significant B-Day, March 29 — and the rest a week later — so many families feel that staying in the UK may be a safer bet. Original Cottages reports a 25% year-on-year uplift in Easter bookings, with Cornwall and Suffolk topping the list.
The popularity of city properties has grown, too: Original Cottages has seen a 56% annual increase in interest. Dromor, a property management company, says London, Oxford and Bath are staple favourites, but cities that host big sports events, such as Cardiff, are gaining favour among people who are turning day trips for a big event into a mini staycation.
This can only be good news for owners of British holiday homes — and a handy steer about where demand lies for those who reckon it might be wiser to invest in Cornwall or Suffolk than in Calabria or the costas.
Bear in mind that the supply- and-demand equation is even more stretched in sought-after hotspots such as the Cornish coastal towns of Rock and St Ives, where there’s a ban on building second homes. In Rock, the sustainable housebuilder Verto Homes’ Lyonesse Lane — where detached “zero-carbon smart homes” will be launched in late summer, from £895,000 — is one of the last schemes to be marketed there to holiday-home buyers.
Investing in a British bolthole is not a budget option. As well as the property price and moving costs, buyers will need to factor in the 3% stamp-duty surcharge on second homes, insurance and potential management fees. For example, a £300,000 purchase would incur £14,000 in stamp duty, rather than £5,000 for a primary residence.
You also need to be prepared to have void periods, furnish the property and cover breakages and spillages. The returns can be worth it, though. Sykes Cottages says its owners’ average gross income is £20,000 (up from £18,000 in 2017), with owners of 10-bedroom properties making more than £80,000.
And while demand is high, so is the competition. “Anyone with an annexe over a garage or who is heading off for a month in summer considers using rental sites to generate some pocket money or make it a sideline business,” says Adam Buxton, Cotswolds expert at the buying agency Middleton Advisors.
Savills sees no reason for the staycation trend to wane. In its recent Second Homes Spotlight, the agency found that 39% of Brits sampled — those who advertised rentals on HomeAway — had bought a short-let home in the UK in the past three years, compared with 14% in the previous survey, done in pre-crisis 2007.
The mushrooming number of holiday-let management companies promises to make owners’ lives easier — and potentially more lucrative — by dealing with everything from marketing to maintenance. One, Hostmaker, claims it achieves a typical occupancy rate of 84% for its London properties (compared with a 72% average for amateur lone London hosts, according to the analyst AirDNA), and an average 30% higher revenue than long-term rentals return.
Few would want to pin their fortunes on the outcome of Brexit and the British climate, but it seems the UK’s holiday-home owners may have found a way to benefit from both. For now.Back to news