Inhospitable: pandemic house price boom in tourist areas prices locals out

Sarah Coles, personal finance analyst at Hargreaves Lansdown, comments on an ONS article showing pandemic house price boom in tourist areas prices locals, especially young people, out.

Key observations:

In some rural and coastal areas, prices rose three times faster than the national average in the year to July – including Conwy in North Wales at 25%, North Devon at 22.5% and Richmondshire in the Yorkshire Dales at 21.4%.
Eden, Powys, and the Derbyshire Dales have all seen price rises of 10% or more in every month of 2021 so far (January to July).
People working in tourist hotspots earn less than people who live there. Cotswold residents earned 28.7% more than people working there, while in the Derbyshire Dales it’s 27.5% and in Allerdale it’s 24.5%.
30% of hospitality businesses were struggling to find staff at the end of August – more than twice as many as in other industries.

Sarah Coles said:

“The countryside and seaside were the property hotspots of the past year, as more city dwellers upped sticks and moved to the sticks. House prices are booming at three times the national average in some of these areas, which is pricing out younger people and those on lower wages. This isn’t just devastating for families, who can no longer afford to live in their hometown, it’s also a nightmare for restaurants, pubs, hotels and ice cream parlours, whose employees are leaving town.

“How and where we want to live has changed over the past year, so more and more people have joined the race for space. The ONS found this time last year that 29% of people wanted to work from home at least part of the time in future, and 12% of them considered relocating as a result. We can’t be sure all this enthusiasm for homeworking has endured, as some people have become increasingly fed up after staring at the same four walls for another year, but there are still significant numbers ready for a change. It means buyers are flocking to the seaside and the countryside, and locals looking for a home of their own increasingly can’t afford to stay.

“Life isn’t much easier for renters either. In tourist areas, renters have been hit by landlords switching properties over to more lucrative holiday lets, to take advantage of the boom in the number of people holidaying in the UK.

“It’s a horrible struggle for young people and those on lower incomes in particular, which includes many of those working in the hospitality businesses that dominate the local economy. It has also created a real headache for these small businesses struggling to find staff, as more of their employees leave the area.”

Kindly shared by Hargreaves Lansdown

Main photo courtesy of Pixabay