The latest research by the Halifax has revealed that properties in seaside towns have doubled in value over the last decade. This is despite some of the toughest conditions in the UK property market this generation is ever likely to experience again and considerably ahead of the average for the British housing market.
It’s always been extremely important for landlords to consider not just short term factors such as the immediate profit they can achieve in some cheap towns where rental yields can be very good but areas where capital growth in property can be achieved. This has become more important as across the market the rate of house price growth has stagnated and even fallen into decline in some parts of the country. With the average value of a property in the UK almost two hundred thousand pounds the implications of picking a property in an area where it may double in ten years as opposed to only increasing by half is pretty huge.
Of course landlords can’t just focus on the appreciation there needs to be a supply of tenants and prospects for growing or at least stable rental yields. Areas to consider could be those with a lot of students or migrant workers where landlords could buy a property for multiple occupants (this may require an HMO license and a specialist HMO Mortgage – call us for more information). In a seaside university town for example this could combine excellent potential for growth with the higher yields usually experienced by HMO properties.
Of course this research is based on historic figures which are not a guarantee of future price changes and a number of worrying factors for the UK could make investing in property risky – you should always seek professional advice before making any investment decisions.
The good news is the factors which drive people to the seaside are unlikely to change too much. More people will consider retiring to the UK seaside as Sterling becomes weaker and the strength of the Euro makes emigrating to formerly cheap locations like Spain less appealing. On top of that the beautiful and peaceful life in many seaside downs attracts the wealthy and people looking for second holiday homes away from the hustle of their London lives which increases demand and prices. Those of us wishing to move to a seaside town might wish prices would fall soon but I don’t believe we’ll be that lucky!