Seaside towns see top house price rises

Seaside towns experienced the biggest house price gains over the past decade, outpacing even the London market, but growth is likely to be slower over the next 10 years, agents say.

Properties in Redruth, Cornwall, saw the largest jump with average prices rising 207 per cent over the decade. Two other Cornish towns, Penzance and Helston, were in the top four, rising 188 per cent and 174 per cent respectively, according to data from Halifax, the mortgage lender.

Seaside towns in the south-west were not the only ones to see big gains between 1999 and 2009. Average prices in Wallsend, in Tyne and Wear, rose from £39,381 to £103,893 – an increase of 164 per cent – while houses in Great Yarmouth, Norfolk, jumped from £55,435 to £144,587, a 161 per cent rise.

All 10 towns that recorded the biggest growth of the past decade were on, or close to, the coast.

“We look at seaside towns fairly frequently and we have noticed that they have tended to outperform in recent years but, even so, we were surprised they dominated the top 10 in quite this fashion,” says Martin Ellis, housing economist at Halifax.

In contrast, Greater London house prices rose just 80 per cent, while house prices in the south-east rose 85 per cent over the same period.

Agents say the growth of the second-home and leisure market has boosted prices of seaside properties over the past 10 years, with a large proportion of people retiring to coastal locations. In addition, the fall in sterling over the past 18 months has encouraged wealthy second-home buyers to purchase properties in the UK rather than overseas.

“We’re seeing massive interest in seaside homes,” says Liam Bailey of Knight Frank, the property agent.

Halifax’s Ellis says the majority of towns that experienced the strongest price growth began the decade with lower than average property prices, which provided the platform for bigger price gains. He adds that the rise in house prices in towns such as Great Yarmouth, Wallasey in Merseyside and Barry in South Glamorgan is more likely to be due to affordability, rather than a sign that they are growing second-home markets.

Bailey questions whether these towns will continue to see growth. “Great Yarmouth has done well in recent years but it’s a little bit challenging to see what could help future growth when the local economy is pretty thin.”

But Sandy Davenport, head of Knight Frank’s waterfront team, says high-end coastal properties have maintained their value over the past few years and have not suffered the same drop as country houses.

“I don’t think we’re going to see demand change for high-end waterfront properties. November and December last year were the busiest on record and going into this year it’s been absolutely frantic,” she says.

Research from Knight Frank shows that the most expensive waterside properties are inland from the coast on river estuaries, such as Dittisham on Dartmouth. The top value for a house in Dittisham is £728,000 compared to an average of £482,000 for houses in the Dartmouth area.

“The key element to determine prime market pricing in coastal locations is access to a river estuary, for mooring boats and for the provision of shelter from both the weather and the sea,” says Bailey.