Seaside Buy to Let
After a previous post led to a lot of folks writing to tell me their experiences of letting at the seaside, I thought this topic was worth a few more comments.
Seaside Buy to Lets
This article is not about any old seaside town. I am not looking at industrial or big port seaside towns like Port Talbot or Felixstowe. The focus here is on the typical seaside town that someone might typically go to for a holiday (or staycation as it is sometimes referred to these days).
(I have to say now, whilst I like British holidays, I don’t really “get” the seaside ones too much – the sea is too cold and so is the air temperature most of the time for my taste, apart from a few random (and unpredictable in advance) days in high summer. Give me Greece any day).
The nature of the British seaside towns varies a lot from fairly depressed places like Blackpool to well off Brighton.
They each have their own challenges. Some seaside towns have a lot of HMOs and that presents its own challenges, others have less.
So what has been happening?
Well, the better seaside towns in many places in the south of England and Wales and the more attractive, already better-off seaside towns in the north have done rather well in terms of property prices and also rental returns in recent years. Most have comfortably outperformed the average performance of other properties in their respective regions.
A big driver for this is home working. More people of the Zoom non-manual type generation are now able to buy property and live in a seaside town as they may only need to go into the office in the big city on an occasional basis. So, they can live further away.
And it is not just people who are buying either. It appears from the reports I have that there are also more renters doing the same thing – and many of them are better off than the tenants who used to be the staple in the seaside towns.
Still, at the same time, it seems a lot of seaside buy to let landlords who have enjoyed some very strong capital growth in recent years are taking the opportunity afforded by current high property prices to get out of the game and sell up.
Others are giving up with long term lets and are moving into holiday lets where the increased demand for staycations in recent years means they can fill their properties for longer than ever they could before and enjoy a much less onerous tax regime as well.
I am frequently told that these factors have combined to create a shortage of properties available for long term rents in seaside towns.
In some pretty “fishing villages”, restrictions on what can be done to individual properties means they cannot be upgraded to ever meet grade C on the Energy Performance Certificate. (This is all so the tourists can enjoy the quaint fishing village look).
Some former buy to let landlords are reluctant to go into the holiday letting game as there is always some degree of resentment from locals who are often priced out of anywhere to either rent or buy.
Some towns have now restricted the number of properties that can be used as holiday lets or second homes, but a study by the LSE of this policy in St Ives found it did nothing to increase the amount of affordable housing for local people. Other evidence is of a reduction in the number of holiday makers coming – this has had some impact on local jobs, which clearly depend on the holiday makers spending and servicing that whole economy.
In Wales, First Minister Mark Drakeford has ensured second homeowners will face council tax bills four times higher than owner occupiers from April 2023. Cornwall Council has recently abolished the one month exemption from council tax when a tenancy ends and a property is vacant.
But surely the only real solution to all this is to build more affordable homes for the local population to either rent or live in. These should be good homes, but I guess not in the seafront locations that will see them just gobbled up by out-of-town wealthy second homeowners or by investors wanting to make a buck from holiday lets.
It must to be up to the local seaside town dwelling people to vote for more of this urgently required affordable new homes to be built near to the seaside towns. Stupid solutions of the sort that the ever-dim Drakeford has come up with will not achieve any lasting change and will have adverse consequences locally.
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