The South West Holiday Home Market since Brexit

Since the results of Brexit we have really seen a change in the type of properties second home buyers are looking for. With May and June being quiet months for all estate agents due to the run up to the vote, the summer months brought a huge increase in demand from holiday home investment buyers.

Post Brexit Buyers

These buyers are looking for affordable properties with a proven track record of rentals. These buyers are living throughout the UK and are looking for a safe haven to place their money in for retirement. Mainly over 55 years of age, they are earning little interest from their money sitting in the bank, and the uncertainty of what the economy will do when the UK actually starts negotiating with Europe next March has led to a flight to bricks and mortar as a tangible asset. Another bonus for these buyers is that can use and enjoy their holiday home when not let out.

A good example of this is Leigh Cottages in Weston. Eight 1 & 2 bedroom homes on this immaculate site (not forgetting The Donkey Sanctuary), close to Sidmouth, the Jurrasic Coast. Our client has owned the whole development for over 10 years and has built it up to be a very successful business with great lettings and income. leigh cottages

They are now selling the properties individually as a freehold, and when the last house is sold the management company will be handed over to the new owners. Launched in July, there are now only 2 homes left. Luckily we are just about to be instructed some holiday homes nearby that have have use of an indoor pool and have a restaurant on site.

Initial Decline in Properties as Second Homes

The market for larger second homes has declined slightly since Brexit as the buyers looking from £350,000 upwards seems to be taking a more of a ‘wait and see’ attitude. The perception is that the returns on properties over this figure is not attractive enough for them to take the plunge. However we feel this market will come back strongly later in the year and through 2017. When they start to hear from the holiday letting agencies about the record lettings that have taken place this summer (with many late bookings taking place just after Brexit as Sterling fell) and many holiday homes still fully-booked in October.

Some of our developer clients are reacting to this increase in demand for UK property delivering income and holidays at the same time.bay retreat Bay Retreat near Padstow is offering 2 bedroom holiday homes at £149,000 with a guaranteed net 6% return for the new owners. Another scheme called Una St Ives in Carbis Bay Cornwall is just about to launch a sale and leaseback scheme, which offers new owners a guaranteed return on a completely managed basis – you just hand the keys to the onsite management team and they take care of everything for you, and you receive a cheque at the end of the quarter. When you come to stay in your home, you will find it in immaculate una st ives condition, with clean sheets, so all you have to do is turn up dump your cases, and go for a drink in the bar whilst the kids play in the indoor pool and decide whether to cook or eat in the onsite bistro. More details coming soon.

Rise in Expat buyers

Another interesting factor since Brexit is the number of expat buyers registering from Europe, especially from Spain and France wanting to buy a second home in the UK for their main residence. From the age of these buyers and discussions with them, they are looking for a main home address in the UK so they can take advantage of the National Health Service as they perceive the reciprocal agreement with have with the EU at the moment with regard to Healthcare will come to an end when we actually leave the EU. These buyers are looking for stand alone homes that they will use during the Summer months, and then let out at other times to cover costs a along as they can use them as their main residence in the UK. We feel this type of buyer will become more active in the market place in 2017 and beyond.

Increased Demand

In summary the demand for UK holiday home investments has increased since Brexit (Chartsedge were even interviewed by the BBC on the effects on the property market post-Brexit voting), but the buyers now are looking for value and are doing a lot of research before taking the plunge.

If you’re looking for a holiday home in the South West, or need guidance or advice for your property needs following the Brexit decision please contact us.