The seaside town of St Ives is perhaps too pretty for its own good. The former fishing port on Cornwall’s rugged north coast has been a favourite destination for UK holidaymakers for generations. But as visitors became enamoured with the place — many of them from wealthier parts of the country, notably London and the south-east — so an increasing number started buying properties to use as second homes or to let out.
With residents blaming “second-homers” for pushing up property prices and hollowing out the local economy by deepening the town’s reliance on tourism, Cornwall council decided to act. However, local property agents insist the council’s main policy has backfired.
In 2016, St Ives residents voted in a local referendum that led to the introduction of a “principal-residence policy” banning the sale of new houses as non-primary residences. At the time, the average property price in the town was about £323,000, according to Hamptons, nearly 14 times the median annual earnings in Cornwall, according to the Office for National Statistics. The new regulations were designed to allow locals to buy new properties without competition from wealthy second home buyers and keep prices affordable, the council says.
But because new homes accounted for only 5 per cent of homes sold in St Ives last year, the effect on the wider market has been negligible — and agents insist the regulation is hampering supply.
“It is like trying to shut the stable door long after the horses have bolted,” says Jonathan Cunliffe who oversaw the Cornwall region for Savills until setting up his agency, Cunliffe, last year. “The policy is quite idealistic; a lot of these measures brought in by politicians don’t work in the real world because developers aren’t going to develop and investors aren’t going to invest.”
“Builders have disappeared,” says Paul Le Bas, a regional director at local agent Miller & Sons. “The policy was definitely too late and had the reverse effect to what the council had wanted.”
House prices have grown — albeit at a slower rate than in the past. The average property price has increased 3 per cent since 2016 (at times in the past decade prices were growing at more than 10 per cent a year). Second-home buyers seem undeterred, with many shifting focus from new homes to existing stock. In 2015, second-homers bought 25 per cent of all properties sold in St Ives through the Countrywide network of estate agents. Last year, they bought 32 per cent. Le Bas recently sold an ex-local authority three-bedroom house for £240,000, the kind of house he says second-homers would once have “turned their noses up at”. He estimates that four years earlier it would have sold for about £175,000. The house is now being run as a holiday home.
“St Ives is no longer a town — it’s a business and should be run as a business,” says Le Bas. “The only income in the town is tourism.”
Those who helped design the plan say that three years is too early for conclusions to be drawn. Rita Lait, vice-chairman of the town’s planning committee and a board member of the Neighbourhood Plan Review Group, says that while there was bound to be a pause in housebuilding and the number of properties sold, positive effects can already be seen. The “Costa del Sol-type holiday developments” are being replaced by new builds designed with local community needs in mind, she says. Bradley’s estate agents is selling a new three-bedroom home, which is reserved as a primary residence, for £315,000. A four-bedroom house unaffected by the policy is for sale on Windsor Terrace for £800,000, through Miller Countrywide.
Some local business owners are unimpressed with the regulation. “I don’t think it has made any difference,” says Ryan Harvey, who runs a family butchers in St Ives. He thinks that determined second-homers are likely to find ways around the legislation.
House & Home Unlocked
Welcome to a new newsletter for smart people interested in the property market and curious about design, architecture and interiors. Every Friday, in your inbox.
Buyers of the new homes will need to provide proof the properties are being used as primary residences if challenged by the council. This could be enrolment in local school or healthcare services, or being registered on the electoral roll, the council says.
It is unclear if the policy will help limit the spread of short-term rental sites. According to data from AirDNA, which tracks the short-term rental market, the number of whole-home listings on Airbnb and HomeAway has grown 74 per cent in the past two years, to 1,192.
It is not only second-homers who make money through holiday lets. One local resident, who did not want to be named and who lets their home out on Airbnb over the summer while they stay with family elsewhere, said: “People in the town get quite annoyed about it because St Ives has that big history with guesthouses and they see what we do as disrupting those traditions. But I do seasonal work and can hardly afford to live in the town as it is now.”
- The average price paid for a home in St Ives is £351,800
- In 2011, a quarter of homes in St Ives were being used as second homes — the number had grown 67 per cent since 2001
- In 2016, there were 310 property sales in St Ives, of which 26 were new builds. Last year 13 out of 270 sales were new builds
What you can buy for . . .
£410,000 A two-bedroom beachfront fisherman’s cottage
£900,000 A three-bedroom end-of-terrace house with stairs directly down to a beach
£1.4m A five-bedroom modernist villa in Treloyhan with sea views and a pool
More homes at propertylistings.ft.com
Follow @FTProperty on Twitter or @ft_houseandhome on Instagram to find out about our latest stories first. Listen and subscribe to Culture Call, a transatlantic conversation from the FT, at ft.com/culture-call or on Apple Podcasts
Get alerts on UK prime property when a new story is published