Western Morning News (Saturday)
Property ‘gold rush’ looks set to continue
New ways of working, staycations, low interest rates and an economic bounce-back continue to fuel the housing market, reports Louise Thomas
SOARING Westcountry house prices show no signs of stalling as an economic bounce-back fuels relentless demand, writes Louise Thomas.
Estate agents in the region have reported unprecedented urgency amongst buyers, and some of the biggest price rises recorded in recent decades. And the property ‘gold rush’ looks set to continue, as economic recovery coupled with chronic housing shortages push prices up.
Simon Cooper, a partner at Stags estate agents, said: “There is no sign of prices falling and there is no reason for this to happen.”
SOARING Westcountry house prices show no signs of stalling as an economic bounce back fuels relentless demand.
Estate agents in the region have reported unprecedented urgency amongst buyers, and some of the biggest price rises recorded in recent decades.
And the property gold rush looks set to continue, as economic recovery coupled with chronic housing shortages push prices up.
Simon Cooper, a partner at Stags estate agents, said: “There is no sign of prices falling and there is no reason for this to happen.”
In the first half of 2021, agents estimate house prices climbed by around 10 per cent in the Westcountry and while the second half of the year is likely to see the market steady, there are no indications that prices will fall.
Despite the staggered withdrawal of the Government’s Stamp Duty exemption and the end of the furlough scheme, agents report a buoyant market.
This is likely to be bolstered by latest figures, which show falling UK unemployment and the number of job vacancies in July passing 1 million for the first time on record.
Mr Cooper said this positive economic outlook and job vacancies across many sectors of the Westcountry market was likely to drive wage increases and create new opportunities for house buyers.
“We have seen around a 10 per cent increase in the first six months of the year, I would say we might see a five per cent increase in the second half. Will we see a five per cent decrease? I really can’t see it because there is still massive demand for people wanting to live in the Westcountry.
“There are positive signs in the economy. There is a massive skills and worker shortage in the Westcountry. If someone wants to work there is a job to have, whether that’s in the service sector, hospitality, property, manufacturing, construction.
“If you are in employment you are probably very busy right now and this will put wages up and, in turn, people will have access to cheap bigger mortgages.”
From multi-million pound Cornwall properties bought without being viewed to panic buying and South Hams homes selling for 30 per cent over the guide price, the Westcountry housing market has struggled to keep up with demand.
Theo Spink, Director of Waterside Property at Luscombe Maye in the South Hams, described the market as “crazy,” with thousands of buyers on the company’s books chasing a chronic shortage of housing.
“All of our offices have seen a massive increase in the number of people wanting to buy in the South Hams,” she said.
“Covid has brought in a rush of people who have discovered they do not have to go into the office five days a week. This is a very beautiful part of the world and we have outstanding secondary schools. If you can bring your work down here and just go into London two or three days a week, you can give your children the best education the state can provide and have the lifestyle to match, why wouldn’t you?”
In the ever-popular coastal town of Salcombe, Mrs Spink said there were properties reaching “silly” prices.
“In Salcombe we have seen some very silly best and final offers,” she said. “We have had properties go for 30 per cent over what they were put on the market at.”
While it is impossible to be certain what house prices will look like in the foreseeable future, she said the improving economy made any stalling of prices unlikely.
“As long as interest rates stay low and the general economy continues to improve, which it clearly is at a faster rate than everybody expected,
I can’t see why house prices would stall or go into freefall.
“If you look at the people registered on our system, we have thousands of people looking for a property and a chronic lack of supply.”
Across the South West, average property prices are 16 per cent up on a year ago, according to Rightmove, with a detached property selling for an average of £485,807.
Property hotspot Cornwall saw a 17 per cent increase in sold prices in the twelve months to June, an increase matched by Dorset which is the most expensive area in the South West, according to Rightmove.
In Somerset, sold prices were a massive 19 per cent up and Devon saw a 14 per cent increase.
The ability to work from home and be nearer the coast or countryside, together with low interest rates, 95 per cent loan-to-value mortgages and banks being more willing to lend has fuelled demand for a very limited supply.
Mr Cooper, at Stags, said: “Demand is still massive. Recently we had a sale fall through due to a change of personal circumstances. We are selling that property for more now than it sold for in April/May.
“The Westcountry has been a UK property hotspot. There has been a rush to get out of urban areas.”
However the region’s major cities have also seen prices shoot up, with Plymouth recording an eight per cent increase in sold prices over the last year compared to a 5 per cent rise in Exeter.
Mr Cooper hopes an end to Stamp Duty incentives and the return to a more normal way of life will encourage a measured approach to house hunting, rather than the “crazy” panic buying seen in recent months.
He said there were times in the late 1980s and 1990s when house prices had risen at a greater rate than that seen in the last year.
However, what has been unprecedented is the urgency with which buyers want to view and offer.
“What has changed is technology,’ Mr Cooper said. “Back in the 80s and 90s you would put an advert in a newspaper or in the post, now an email goes out and the phones go into meltdown.”
Behind London and the South East, the South West is now the most unaffordable place to live in the UK based on the median property price to earnings ratio.
However across the regions, prices and demand vary greatly, with an average house price of more than £1.1million in St Mawes, Truro, compared to under £190,000 in Camborne.
Andrew Chilcott, of Cornwall-based Lillicrap Chilcott, said areas such as The Lizard continued to attract a steady flow of buyers, while the Fal Estuary, St Ives, St Agnes, Helford Passage, Padstow, Polzeath, Rock and Devoran remained among the more sought-after.
“Cornwall has long been an aspirational place for people to wish that one day they could live,” he said. “Covid acted as a catalyst for people making the move. Different sectors of the market moved at different paces.
“The biggest issue that buyers have in Cornwall is that there is not a huge amount of stock available.”
Mr Chilcott said restrictions on international travel had encouraged people to invest in holiday homes in the South West, further restricting supply.
These same issues are reflected in the rental market where more stock is being moved into the holiday sector as owners see greater returns.
Mr Chilcott said a look on Rightmove revealed just 112 properties available to rent in the whole of Cornwall.
“There are not enough houses to rent,” he said. “A lot of housing has moved to holiday let. I heard that in St Ives there was one property available to rent and over 300 available on Airbnb.”