Despite the economy being impacted by COVID-19, the UK’s property industry is seeing a surprising and much welcomed resurgence. Property prices are at an all-time high, with the average UK home now standing at around £241,604, a 3.8% increase than a year ago according to the Halifax house price index. A national housing shortage, coupled with Chancellor Rishi Sunak’s “summer budget” stamp duty holiday, has resulted in a buying surge, which has rapidly pushed up prices.
Unfortunately, not everyone is in the position to enjoy the benefits of owning their own home, so it Is no surprise that rental demand has also increased, by as much as 20% according to property listings website Rightmove. This is evidenced by the British Property Federation (BPF) which revealed this month that between the second quarter of 2019 and the same period of 2020, completed build-to-rent homes rose by 37% and the number in planning soared by 27%.
With Prime Minister, Boris Johnson’s, economic recovery moto being “build, build, build” and Housing Secretary Robert Jenrick overhauling the country’s outdated planning system in order to create “better quality neighbourhoods and homes across the country”, there has never been a more reassuring time to buy, rent or invest, and one such place is the South West of England.
Do not sleep on the South West
Famous for its delicious produce including pasties, seafood and cider, the South West region is a tourism hotspot, thanks in part to its splendid coastline, sandy beaches, rolling hills and silty estuaries. It is also home to eleven areas of outstanding natural beauty, four UNESCO World Heritage Sites and two National Parks. For those sick of the hustle and bustle of city living, its remoteness and tranquillity really must be experienced first-hand. However if you are more interested in investment returns, you will not be disappointed. Look beyond the region’s idyllic façade to consider the facts and figures, and you will find an area rife thriving with business, infrastructure, investment activity and most importantly opportunity.
With an economy worth £25.5 billion, four world class universities, four airports and two ports, the South West can certainly be described as an attractive place to do business and a gateway to Europe. It is no surprise then that it makes an important contribution to the UK’s GDP, being home to companies drawn from such sectors as biotechnology and pharmaceuticals, environment, and renewable energy as well of course, food and drink. It would be remiss to also not mention its large concentration of global aerospace players and diverse supply chain of 800 companies supporting approximately 98,000 jobs in the wider economy.
Given these advantages it is clear why the South West was crowned the happiest region to live in Britain according to a nationwide survey last year by Lloyds Bank and YouGov. It is no wonder then that people are flocking to it and this is reflected in its housing activity. Lettings management platform, Howsy, recently revealed that the South West was in the top three of UK regions for annual house price growth and current average rental yield. The average price of properties according to Rightmove stands around £296,910, which is “cheaper than South East (£409,329) and London (£636,742)” regions often touted as investment hotspots. Interestingly it has also benefited from the strongest annual rental price growth since May 2020, at 2.5%, according to the latest figures from the Office for National Statistics (ONS).
Cornwall – a property investment case study
While there are numerous south west locations for investors to put their money into, for those unfamiliar with the region, a good starting point to showcase its potential is Cornwall. Situated at the extreme southwestern peninsula of England, Cornwall is the ninth largest county in the UK and renowned for being an area of outstanding natural beauty. This is the main reason it is officially the UK’s favourite holiday destination having been voted number one in the British Travel Awards numerous times over the years.
Naturally, hotels, leisure and tourism are the foundation of Cornwall’s economy, accounting for as much as 25% of the jobs and a significant proportion of the regions GDP in many areas. In the summer tourists flock to Cornwall and the population can soar during the summer. The town of Newquay for example, famous for its excellent surfing conditions, can see its population rise from around 22,000 people to well over 100,000.
According to Rightmove most of the sales in Cornwall had an overall average price of £277,988 and house prices were up “4% up on the year before and 9% up on 2017 when they averaged at £254,555.” Such has been the demand for holiday homes that website cottages.com revealed an increase of up to 25% in just one week after the Chancellor made his stamp duty holiday announcement, while visits to its “Let Your Property” pages increased by 180%.
If the opening arises to secure a foot into the exclusive and highly contested Cornwall property market, any investor that does so can be confident they will benefit from a secure and lucrative opportunity, safe in the knowledge that Cornwall will always remain a highly attractive location for tourism.
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