House prices are rising at three times the national rate in some rural and coastal areas leading to concerns many homebuyers will be priced out of these markets.
A report published today by the Office for National Statistics (ONS) has highlighted steep house price increases in tourist hotspots around the UK with annual rises of as much as 25% in Conwy, North Wales and 22.5% in North Devon in July 2021.
In comparison, the average UK house price increased by 8% over this time to £256,000.
It has led to fears some workers may be at risk of being priced out of living in these areas as both house prices and rents are getting higher. The report said this could lead to skills shortages in the hospitality and tourism industries that these local economies rely upon.
One of the main contributors to these price spikes has been the ‘race for space’ as city dwellers have been escaping to more rural communities as a consequence of the pandemic.
The thriving holiday let market has also helped boost prices in these tourist hotspots. Indeed, the report said rents were rising as tenant demand increased and landlord instructions fell.
It suggested some landlords had been focusing on the holiday let market which had left fewer long-term lets for prospective tenants.
Karen Noye, a mortgage expert at Quilter explained how various consequences of the pandemic had driven this trend.
“It’s no secret that the pandemic has vastly changed how we view where we live and work,” she said.
“After months of being in lockdown and even the threat of fines for travelling to the UK’s beauty spots people are understandably looking to up sticks from the city and move to more rural or coastal regions.”
But, she explained, this was having a negative impact on those who grew up in these areas.
“Young and low paid workers are simply unable to buy a house in the towns and villages they might have grown up in as they surge in popularity.
“In turn this will lead to some of these types of places finding it difficult to fill vacancies and while the natural beauty won’t change some of the other reasons that have attracted newcomers like the amenities and hospitality will find it tough to get back on their feet following the pandemic.”
She added there may be a ‘real risk’ of house prices in these regions staying inflated for some time as people took advantage of a new hybrid working style and were able to move further away from the office.
