Waterfront properties in the UK have always been popular and now new research shows that the very best are priced as much as 81% higher than comparable inland homes.
Living by the water, whether it is a country house by a river, a one bedroom flat by the sea or a cottage next to a loch, is the ultimate lifestyle choice, according to the latest prime waterfront index from real estate firm Knight Frank.
And it is not just British buyers competing for the very best, there is always demand from overseas buyers, with 55% of international searches coming from Europe, and 26% from North America.
The report points out that the UK has a wide variety of waterfront locations that appeals to a diverse collection of buyers and a clear premium is paid by buyers for homes in close proximity to water.
‘For a number of purchasers it’s the ultimate lifestyle choice. Waterfront property is very niche and very desirable, often in a market of its own and that helps to underpin values,’ said Christopher Bailey, head of national waterfront at Knight Frank.
An analysis of valuations from Knight Frank’s experts across the country shows that prices for prime waterfront properties are as much as 81% higher than comparable inland properties.
The index measures the potential value uplift for prime homes on the water’s edge, or within close proximity to water, compared with similar properties located further inland.
Not all prime waterfront properties are equal, of course, and a closer look at the data reveals that the premium varies by location. The South West offers the most added value at up to 105% and the region is home to some of the country’s most expensive waterfront properties, with Sandbanks, Rock, St Mawes and Salcombe some of the hotspots.
‘The most significant proportion of West Country buyers are looking to move out of London and the Home Counties bordering the M25. Interestingly, there is also significant interest in luxury waterfront properties from the Midlands, stretching down to the Bristol area,’ said Bailey.
‘Many of our clients who are selling their homes, particularly in the South Hams, live in the Midlands and come down for the weekends and holidays driving down the M6 and M5 motorways,’ he added.
In East Anglia the very best waterside homes can command premiums of up to 51%, dropping slightly to 48% in the South East and 43% in Scotland. The report says that the figures are underpinned by the fact that the most desirable coastal towns and cities across the UK appeal to a broad range of buyers.
‘The diverse nature of waterfront property across the UK attracts a real melting pot of buyers from all walks and at all stages of life, whether they be upsizers, downsizers or simply those looking for a lifestyle change. International buyers also form an important, part of the market,’ Bailey pointed out.
‘The appeal really is global. Our web search data shows that individuals from all over the world searched for prime waterfront property in the UK last year, led by potential buyers in the US, Germany, France and Spain,’ Bailey said.
He explained that a weaker pound following the European Union referendum has also benefitted non-sterling denominated purchasers, with Knight Frank figures showing a notable increase in the volume of expats buying waterfront property in 2016/2017 compared with the previous year.
‘In most cases the view is more important to buyers than the property itself. You can alter the property, but you can’t alter the outlook. The most important aspect to understand from a buyer’s perspective is the lifestyle they are looking for and how that can be matched to the property they will buy,’ added Bailey.
Looking ahead, the report points out that the introduction of a higher rate of stamp duty for additional properties, including second homes, in April 2016, has had an impact on a market where historically there has been a notable level of discretionary purchases.
‘We are now over a year away from those changes and the market has broadly absorbed these additional costs. However, the net result is that we are generally not seeing sales prices increasing. These changes to stamp duty on second homes seem to be keeping a lid on any upward price movements in the near term,’ he concluded.
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