How to beat Cornwall’s holiday let crackdown

When Tom and Liz James decided to buy a house in Cornwall to use for family breaks they had every right to feel a touch apprehensive.

Outsiders buying West Country homes for use as boltholes-cum-income generators have been the focus of considerable anger in recent years, blamed for hiking house prices beyond the means of local buyers.

Councils have attempted to stem the flow, with council tax surcharges for second homeowners and bans on them buying some new homes. But yet the Grockles keep on coming.

And, said Tom, the reception he and his family has received has been overwhelmingly positive since they invested circa £500,000 in a five bedroom house in the village of Tywardreath, two miles west of Fowey and a mile from the beach, in 2021.

“The only place I have seen any animosity has been on the village Facebook group,” said Tom. “People complaining about outsiders, and saying things like they would only sell their home to a local person. But actually, most of that is just one or two people moaning. What we have encountered is people who are very friendly and welcoming to us.”

Perhaps this is partly because the couple do not fit the wealthy incomer stereotype. Tom, 37, is a Church of England priest, Liz, 36, is a GP, and the couple and their children, Persephone, three, and Montgomery, one, currently live in tied accommodation near Exeter.

They bought the house not just as a holiday pad but with the thought that they might one day live there full time.

The couple opted to live just inland mainly because they found Cornwall’s well known coastal hotspots just too frenetic in summer. “You would struggle to find a property with parking and a garden right by the sea,” added Tom.

The couple began renting the house out to holidaymakers in May 2021, using sykescottages.co.uk, and have been fully booked each year since, from spring until September. 

They spent their first two winters doing renovations but this year they are also seeing winter bookings come in. Weekly rates vary from £3,000pw in high season, to £700pw.

Whilst their busy calendar of bookings is good news, as an investment the property is proving less successful. When the couple bought the house they took out an interest-only mortgage at 3.3pc.

When they remortgaged at the start of this year, their rate shot up to 5.6pc. Once costs, including advertising, management, and utility bills, are accounted for the income is still covering the mortgage – but only just.

Tom sympathises with the plight of young local families who can’t afford to buy a property, but points out that not all holiday home owners are hugely wealthy, and judging by his experience, not all make much money. 

“Tourism is a vital part of the economy in Devon and Cornwall, and holiday lets are part of that industry,” he said. “Most people realise how many jobs it provides and how much money it brings in.”

The rules of engagement

The pretty, arty town of St Ives is leading the charge when it comes to attempting to plug the flow of second home buyers into Cornwall. In 2016 it voted to ban the sale of new homes to second home buyers, by making the rule a condition of granting planning permission. 

Fowey and Mevagissey have since followed suit. But the policy is more symbolic than anything else.

The vast majority of the town’s housing stock is second hand and can be sold to anyone. And a 2019 study by the London School of Economics found that all the policy achieved was to shift demand away from new apartments and towards existing homes, leading to price rises.

Undeterred, Cornwall Council recently voted to charge double council tax on second homes and empty homes. The new system is likely to come into force in 2025 (the council cannot act until the Levelling Up and Regeneration Bill passes through parliament). 

The council’s Band D tax is currently £2,221.39, which means second home owners could face annual bills of around £4,500.

Market forces

Just like the rest of the country, Cornwall has seen its pandemic-buzz fade away over the past year.

“Most of the rush to the countryside from the Covid race for space has subsided, with the local authority of Cornwall overall seeing a contraction in price of 2.5pc compared to last year,” said Aneisha Beveridge, head of research at Hamptons.

“Nationally, areas which saw the strongest price growth over Covid, tend to be the places recording the largest price falls today.”

There are, however, some trend buckers.

Fashionable, and expensive, Fowey has outperformed, with prices up by an average 4.6 per cent year on year to £462,000. Prices in Portreath, roughly between St Ives and Newquay and with a good choice of beaches, are up 4.2 per cent to an average of £342,000.

Over the past decade the strongest performers were Newquay, up 79 per cent, and Port Isaac, up 72 per cent, against a county average of 61 per cent price growth.

Interestingly – and despite concerns about excessive house price growth being inflated by incoming buyers and second home owners – many seaside towns have underperformed.

Zennor has only seen a 30 per cent price growth since 2013, while prices in Polperro, Fowey, Coverack, and Falmouth grew by less than 50 per cent in a decade.

Josephine Ashby, managing partner at JB Estates, believes Port Isaac’s has enjoyed above average price growth for three reasons: its lovely beaches, its relative accessibility, and “a bit of stardust” bestowed by its role in the long running TV series Doc Martin and the 2019 film Fisherman’s Friends.

A pretty three bedroom cottage in the village would cost around £400,000 to £450,000.

Ashby said that in the current, nervous market out-of-county buyers are tending to gravitate towards Cornwall’s big name towns – Rock and Fowey, as well as Port Isaac and St Ives. 

“They are very focussed on established prime addresses because it feels safer to do so,” she said. “I would expect those towns to do quite well this year as a result, but it also means there are opportunities for some good deals outside of those existing areas.”

Buyers looking for lower profile options, and more bang for their buck, should consider Crackington Haven or Trebarwith Strand, both slightly north of Port Isaac, but considerably better value. 

Ashby estimates homes in either village are ten to 20pc cheaper than similar properties in Port Isaac.

Compass points

When you think of Cornwall you tend to imagine chocolate box cottages with stunning sea views. But if you want to get as much bang for your buck as possible then buying a little way inland can be a smart move.

Not only will you avoid the holiday hordes, but the entry prices will be significantly lower.

Anna Sharp, a consultant at buying agency Recoco Property Search, estimates that you would need to budget £4m to buy a front line house in Mawgan Porth. In St Mawgan, two miles inland, or a pretty nearby village like St Kew, prices plunge. “A buyer could purchase a beautiful country property with land for circa £2m,” said Sharp.

Another way to cut entry costs is to look west. With a couple of notable exceptions like St Ives, property tends to become more affordable the further it is from London.

An average property in beautiful Sennen, close to Cornwall’s westernmost coast, will cost you £337,000. An average property in the equally pretty Mevagissey, almost 50 miles closer to the Devon/Cornwall border, would cost £424,000.

But you can’t apply this east/west divide rule slavishly: a home in modish Zennor, which is almost as far-flung as Sennen, costs an average of £423,000.

Historically, Cornwall’s north coast has been the more expensive option, but according to Sharp the rush to the county during the pandemic has served to close that gap. 

“Cornwall is now more about the area rather than which coast,” said Sharp. “Traditionally buyers would flock to the north coast due to the ease of accessibility, however, due to lifestyle changes many opt to travel a little further to purchase something special for a premium.”