Cornwall's on a wave: Where does the mini-boom leave local buyers?
Prices are rising, second homes are selling fast and even the Prime Minister is holidaying there
Friday 20 August 2010
Just when did Cornwall get so smart? Forget damp summer holidays spent under canvas with soggy fish and chips for company and think instead of sleek penthouse-style apartments, charming villages and fine dining from the likes of Rick Stein and Jamie Oliver.
Only two years after the property slump burst Cornwall's bubble, leaving stalled developments in its wake, the jewel in the South-west's crown is on something of a wave, with a host of developments on sale, demand increasing and prices rising.
It's hard to believe, but the second-homes market is back in its stride. According to research released this week by the estate agent Knight Frank, the number of second-home owners has soared to record levels. Now more than 250,000 Britons own a second home, with 5,000 more expected to buy this year – many of them targeting Cornwall and the South West.
All this demand is driving up prices, so while the rest of the country, excluding London and the North-west, is experiencing a glut of sellers, a shortage of buyers and expectations that prices will fall, the South-west saw prices rise 2 per cent last month, according to the Royal Institute of Chartered Surveyors.
Why the mini-boom? A new quality-of-life survey from Halifax shows the region boasts 11 of the nation's 35 best seaside towns to live in. Meanwhile Visit Cornwall is reporting that the area's holiday homes are booked almost to capacity for the first time ever, as the Prime Minister, David Cameron, leads the summer charge of tourists in search of British sunshine.
Among the towns leading the Cornish reinvention is Newquay. Britain's surf capital has long been known for night clubs and surfing but is now offering smart beach-front developments to go with its palm tress, easy living and warmer-than-average weather.
Headland Road, formerly the home to run-down surfing hostels and hotels catering for hen and stag parties, now boasts a score of luxury apartment buildings from developer Acorn Blue. All of which have amazing views over Fistral beach, one of the country's most popular surfing spots and home to the Relentless Boardmasters, Europe's largest extreme sports and music festival.
Acorn Blue, which carried on building throughout the worst of the recession, investing £70m in the town, is now offering apartments in six locations across Newquay starting at £199,950 for a two-bedroom Zinc apartment – floor-to-ceiling glazing, terraces and open-plan interiors – and rising to £875,000 for a penthouse at Azure designed by the architects Upchurch Associates (AcornBlue.co.uk; 01637 876 000).
The vast majority of the company's buyers were searching for a second home to enjoy but to also benefit from a healthy return by letting it out for some of the year, says Nicola Markham, Acorn Blue's sales director. "The market has really boomed here over the last few years. Many of our buyers came here as children, loved it, and have now cottoned on that they can come here now and own something wonderful themselves," she adds.
And, while the town may not have returned to the boom times of 2008, when plots of land for development fetched £10m and luxury flats promising "sensational views" and "executive living" set buyers back £2m or more, prices have risen 5 to 10 per cent from their nadir and have climbed consistently since March last year.
The highs and the lows
Nonetheless the town still bears some of the scars of the property slump. Acorn Blue was one of the few developers to build through the recession and has now sold 50 per cent of its apartments, but it's not the same story elsewhere in town where derelict developments of "surf pods" stand testament to the failures of over-ambitious developers.
These stalled projects are a real problem, says Steve Gilbert the town's new Liberal Democrat MP: "Unfinished developments littering the town are a real eyesore and understandably Newquay's residents are very keen to see them completed, so the town can start to feel like a vibrant community again, not a derelict building site, as parts of it do now."
Ian Lillicrap, director of Cornish estate agent Lillicrap Chilcott, is quick to point out that this problem isn't representative of the county as whole. "High-end developments have been good for the town as a whole and got rid of many grittier hotels, but some developers tried to cash in on the crest of a boom, and have caught quite a big cold in the process," he says.
Lillicrap is bullish about prices elsewhere in the county: "Sales this summer have been very strong, which echoes last year when we equalled our record years of 2006 and 2007. This year, if anything, is fractionally ahead of last year."
A 10-minute drive along the coast from Newquay, building work is in full swing at Watergate Bay, a clutch of new developments overlooking a wide sandy beach and centred around Jamie Oliver's beach-front Fifteen restaurant. Already completed is Whitehouse, a building of 10 luxury apartments located just a few hundred metres back from the sea. Set in their own mature gardens a three-bedroom apartment in the converted mansion will set you back £770,000, while more modest two-bedroom apartments are on the market for £495,000.
Further up the coast the established locations of Padstow and Rock remain popular: Padstow, for the culinary delights offered by Rick Stein's clutch of eateries and Rock, on the other side of the Camel estuary, for its miles and miles of pristine beaches. To the east, St Agnes offers village charm in an area of outstanding natural beauty, with prices ranging from about £140,000 for a flat to more than £1m for a five-bedroom family home. It achieved Unesco World Heritage Site status in 2006, so development is unlikely. And if you are looking for peace and quite, the relatively unspolit villages and sleepy seaside towns of south Cornwall feel a world away from the resorts to the north of the county.
Or county in crisis?
Far from the sales office of luxury apartments and holiday homes, locals have long complained that they are being priced off the housing ladder. To add insult to injury, this is happening in a county where there are almost the same number of locals waiting for permanent housing as there are second homes. And, while Cornwall has long been a mecca for retirees and cash-rich buyers, second-home ownership has now reached record levels with over 13,000 in the county as a whole, 4,000, or 9.6 per cent of the total, in north Cornwall alone.
Lillicrap though, who has been an estate agent in the area for more than 30 years, thinks the issue is more complex than one of out-of-county buyers grabbing up property for rarely occupied holiday homes: "As many as 90 per cent of buyers are seeking to relocate here permanently. They are not looking for holiday homes; rather they are a complete mix of people, which is very different from 15 years ago when we were primarily selling to people who wanted holiday homes. It's a real transformation and is extremely healthy for the county."
Steve Gilbert isn't convinced and is calling for a limit of the number of second homes in the area. "It doesn't help people who are born and bred in Cornwall to get on to the housing ladder to have executive developments of second homes springing up across the county," he says. "We do of course need to have high-end new developments, but a crucial part of the jigsaw, which is being missed at the moment, is making sure local people can get on the housing ladder. So many people in the community resent the explosion of second-home ownership as they haven't got as far as owning their first home."
It's hard to argue with this when the latest figures from the Halifax show the county is one of the most unaffordable areas in the country, with towns like Padstow having the dubious honour of average house prices standing 18.9 times higher than local average earnings. Even Newquay's MP isn't immune: "I was probably the only Member of Parliament elected at the recent election who was living with his parents when he was elected. That's the nature of the housing crisis in Cornwall." The county may be on a wave but clearly not everyone has caught it.
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