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Are Airbnb’s the Cause of the Cornish Housing Crisis??


Headlines such as ‘landlords evicting tenants for Airbnb’s’, ‘Cornwall has 10,000 Airbnbs but only 69 homes available to rent’ and ‘greedy holiday home owners’ have jumped out at me from many news articles over the past few weeks.  So I thought I’d take a closer look to see if Airbnb’s are really the cause of the Cornish Housing Crisis.

Firstly, I can agree that from my perspective, its been impossible to walk down pretty much any street in Hayle, Penzance or St Ives without seeing the now all too familiar key lockbox and recycling boxes full of empty bottles.  This means that unless the property is owned by someone who constantly loses their keys and has a drink problem, this is a sure sign that it’s a holiday home!

What is an Airbnb?

Known in the industry as an FHL (Furnished Holiday Let) but increasingly knowing throughout middle England as an Airbnb (why the recent change, I’ve yet to fathom!).  For clarity, whether the property is a caravan on a holiday park, a bijou seaside apartment, or a luxury lodge overlooking the sea, they may be catering to different demographics but are offering the same thing – a holiday.  Like them or loath them, they have always and will always be a vital part of the Cornish economy.

Why have Airbnb’s become such a problem?

The impact of the pandemic has meant that this has been a bumper year for the FHL or Airbnb owners. As is always the case when any industry appears too good to be true, many scramble to jump on the bandwagon.

The rest of us look at the glossy pictures and the eye watering peak week prices and its hard not to feel envious.  This has made it relatively easy to single these business owners out as the cause of the current Cornish housing crisis.  But is this really the case?

Have Airbnb owners taken all our residential property stock?

Sadly, they do appear to have added to the problem. Cornwall has 1 per cent of England’s population and 17 per cent of its second homes. I and many others will struggle with figures like this. However, we also need to be mindful that second homes are just one element fuelling our current housing crisis.

Its also easy to forget that second home owners are by and large, one-man-band business owners, just like your local pub and high street shop.  Yet you don’t read in the press about a pub owner who’s invested their life savings into that business and works all the hours under the sun to give their guests a good experience, as being greedy.  So why is it ok to vilify FHL owners because they’ve invested their hard earned savings in that particular industry? The same has been happening to residential landlords for the past few years.  The rhetoric makes great click bait but is unfair on the individual business owner. 

I certainly don’t see any sign of greed and second home owners cannot be blamed for bad government business policies.

Yes, owners of second homes, who have absolutely no intention of letting out their property, yet still claim 100% business rates relief, need to be hit with heavy fines. Then this loophole needs to be closed.  Yes there needs to be a levelling up of the legislation foisted on residential landlords and that of FHL owners. But not to the point where hard working business owners, who’s businesses support the local community are driven out of either sector.

Don’t get me wrong, I’m not saying we should just allow this trend towards second homes in Cornwall to continue. There should not be second homes in an area where many struggle to secure their primary home. But as always it’s the symptom rather than the cause that’s getting all the press attention.

Holiday lets legislation changes

If we had an even-handed business taxation policy and sensible legislation that works for both landlords and FHL owners, these businesses would sit comfortably in our society. But the FHL sector has been under regulated and taxed for years. This has encouraged a disproportionate level of investment. Add to the mix, the massive underfunding in our social housing over the past 20 years and we now have a housing crisis that’s spiralling out of control.  Predictably when situations get this bad, the powers that be panic and take a sledgehammer to crack a nut.

This is exactly what’s about to happen with the FHL industry.  English, Welsh and Scottish governments are currently drafting plans to target all second home owners.

However, before anyone gets excited about this, lets stop to think about the impact of the legislation changes for a moment.

If, as is looking more likely by the day, all holiday let business owners will have to register (to name just one piece of legislation coming down the line). However, the Scottish government has proposed that all FHL owners will then have to re-apply every 3 years. This idea is also being considered by the Welsh and English governments. The business owners will also have to notify potential holidaymakers of this in advance. This addition to the legislation will meant that (a) their costs are going to increase and (b) it will add uncertainty for them and their guests.  Uncertainty isn’t good in any industry.

I agree with the registration idea. But having to re-apply every 3 years doesn’t feel very well thought out. The sledgehammer approach to legislate an industry drove many residential landlords sell up and I fear the same will happen here. This will have a knock-on effect on the local economy.  Pubs shops and restaurants will suffer too, as they all need one another to survive. 

So all I’m saying here is that we should be careful what we wish for. Knee jerk legislation is never a good idea.

Surely, Airbnb’s are raking it in, so they can absorb additional costs?

In fact mostly this is not the case. The FHL industry is not the cash cow its been made out to be.  Yes the peak week rental prices are high but these are for a maximum of 6 weeks a year.  What about the other 46 weeks? Most FHL’s will be empty for 3-4 months and will earn a fraction of what they’d get in the summer during the remaining 6 months.  For the majority, their net margin is on par with that of a residential landlord at around 5%.

This means that whilst an FHL is still a good investment (until the incoming legislation kicks in), it takes exceedingly hard graft to earn this. Its not easy money. If the hourly rates of the property owner is factored in, they’d be earning well below minimum wage in most cases. As with all industries, there are exceptions to this  – such as the luxury end of the market, or the sleeps 10+ types of properties but these are in the minority. 

The bottom line is that whilst Airbnb’s are a symptom of the Cornish housing crisis, they’re not the cause and the majority are just hard working local business who’ve spotted an earning opportunity.

If Airbnb’s aren’t the cause of the Cornish Housing Crisis, who or what is?

I agree that something urgently needs to be done to tackle the housing crisis. I’ve been banging on about this for months. And yes less ‘Airbnb’s would help.  However, what Cornwall desperately needs are more affordable houses for only locals to buy, better mortgage packages to make this possible and then a decent stock of social housing for those that can’t buy. 

The government also needs to backtrack on its decision to freeze Local Housing Allowance and cut Universal Credit. This risks pushing many households further into poverty, problem debt and potentially homelessness. 

We as individuals however, need to remember that hospitality (of which holiday properties form a large part) is a tough and often thankless industry. This year more than ever, many of us have needed and benefited from it.

So lets direct our anger and energy away from small, local businesses. We need to challenge the housing and business policy decision makers who’ve allowed this crisis to happen: Our MP’s Cornwall Council and ultimately, the government.

Have your say

Do you think Airbnb’s are the Cause of the Cornish Housing Crisis, or like me do you think that whilst we need less they’re not the real problem? Please let me know your thoughts. You can comment below or by all means contact me directly by email.

About the Author

Hi, I’m Deborah from CAM Residential Lettings in Hayle. I love writing about the local property market – the good, the bad and the ugly! I also from time to time, write blogs about the local towns we cover. My most recent has been about Hayle but watch this space for future articles on Penzance, St Ives, Camborne and Carbis Bay too. There will always be a property connection in there somewhere.

Please feel free to suggest topics you’d like me to research.

If you’re a second home owner and are considering the pro’s and con’s of being a residential landlord, please contact myself or John for an informal and no obligation chat. here’s our office contact details:

01736 755077

20 Fore Street, Hayle, TR27 4DY

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The G7’s Effect on West Cornwall’s Housing Crisis

g7 Leaders

This week I had every intention of writing a simple article, comparing house prices in Hayle, Penzance and St Ives. But then my brain got hijacked yet again by West Cornwall’s housing crisis.

Mirror Image of warship in St Ives Bay for the G7 Summit

The world’s press shines a spotlight on West Cornwall

I, like the majority of the locals have loved the spectacle that the G7 has brought us. My son goes to St Ives School and the drive in has never been so exciting. The area has been a hive of activity for weeks, as West Cornwall prepared itself for the arrival of 10 of the major world leaders.

I hoped this stunning location would sprinkle a little bit of its fairy dust over these decision makers and it would help to bring about changes in the way the world tackles climate change and poverty.
I was even prepared to overlook the irony of the rather large motorcades and the air miles travelled by these leaders, if these meetings deliver real change.

But, I had a nagging feeling that with the area suddenly being thrust into the spotlight of the world stage, this might fuel the already overheated local property market.

Mount Recyclemore created to get the attention of the G7 world leaders when they were in Cornwall

Rightmove searches for Carbis Bay increased by 103%

Then on Friday I read in one of our regular trade bulletins:

The number of people searching for property in Carbis Bay has more than doubled in a day, as home-hunters check out the area currently on the global stage, according to Rightmove.
Buyer searches for Carbis Bay were up 103% on Wednesday 9th June compared with the previous day.
Cornwall was actually the most searched for place on the property portal last month, as coastal destinations grow in popularity ahead of the summer period.
Rightmove’s spokesperson Tim Bannister said: “All eyes are on Carbis Bay right now, and with supply so limited, coupled with the price premium for the county and the fast pace of sales, it’s only a lucky few who will be able to move there, but thousands of others are checking out what’s on offer

Whilst not surprising, this is worrying none the less. Our database of people looking for properties isn’t going down. I also know from speaking with estate agents in the area, that there’s still a huge shortage of properties that are coming on the market. This means that any new listings often go for more than the asking price.

Early in the G7 weekend Mr Johnson stated that £65m was going to Penzance, St Ives and Camborne for local projects. This ‘New Investment’ will be going towards footpaths, cycle paths, theatres, sports clubs and historic buildings.

Whilst this is a lovely gesture, it won’t help the local people who have nowhere to live. What a difference it would make to so many more locals families if the £65m was used for a social housing initiative in the area!

Cornwall Council Missing the point

On top of all this, Cornwall Council sent out a survey for locals titled ‘Lets Talk Homes’. They go on to explain that they are starting to review their housing strategy for Cornwall and would like locals to have their say. ‘Fantastic’ I thought. Then I read the rather bizarre questions that appear to have no comprehension of the Cornish housing crisis.

I appreciate that this is the start of their planning process but until the core problems in the local housing market are addressed, all their ‘blue sky’ ideas, meetings and strategies will be a complete waste of time and money. Here’s the link to their questionnaire. I urge as many locals as possible to complete it with factual, real life problems and what we really need them to focus on.

A very wise boss of mine once said ‘I don’t want you to come to me with problems, come to me with solutions to the problem’.

For what its worth, here are what I believe are the problems in the West Cornwall Housing market and my solutions to them?

Problem 1 – Not enough council/social housing

There are and always will be people in our community who for a variety of reasons will never be able to buy their own home. They are the long-term renters and are often some of the most vulnerable in society. They should not be in private rented properties and they should never have to experience the indignity of being made homeless because a landlord wants or needs to sell their home.

Solution: There needs to be a social house building strategy for the whole of Cornwall. This is in my mind is the single biggest issue that must be addressed. Whilst the other solutions I mention below will help, its this strategy that would have the greatest impact.

Cost is a red herring

Yes there would need to be initial funds to build, but housing stock has a value and is a growing asset. They could borrow against these assets and even sell off council homes to tenants in the future if they needed to raise funds. As long as there are safeguards in place, similar to some of the house building initiatives for locals there are around. And importantly as long as the money made is re-invested in more housing and not squandered as was done in the 80’s.
The other benefit of council owned properties is that they would be in control of rental costs and not be so affected by market changes, as we’re seeing now.

Problem 2 – house prices in West Cornwall being over 8x the local average wage

There are a few great initiatives, where houses are built and sold specifically to locals. The prices are capped and there’s caveats to stop them being profited on in the future. These are perfect for people who want to be sure they have a home for life in the area they’ve grown up in or have lived in for many years and have no intention of ever leaving.

There are a lot of working tenants who can afford over £1,000 a month in rent but can’t buy a home. These are the very people who should be able to buy one of these homes but there just aren’t enough to go round.

Solution: These housing initiatives are great and we just need far more of them. They also need to be given priority to build over the large, overpriced house builders.

Problem 3 – Mortgages have become near impossible to secure if you’re self employed

How is it fair to expect a self employed person to have a minimum of 2 years of accounts before they can even apply for a mortgage. Yet an employee can have a job for 3 months and be able to secure a mortgage and then be out of a job in month 4? Most self-employed have savings because they know to cover themselves for lean periods and they often have more than one income stream too.

Solution: Mortgage companies should look at a person’s income, expenditure and savings over a year (self employed and employed). This will give a far better idea as to an individuals risk factor and their true affordability level.

Problem 4 – Too many tax breaks and not enough legislation around the holiday letting market.

I have nothing against hard working holiday let businesses, but I do have a problem with them being disproportionately more tax efficient than a residential let. Especially when you think that residential landlords are putting a roof over peoples’ heads and holiday lets are a luxury. We need both in Cornwall but there should never be holiday lets to the detriment of people having a home.

On top of this its also too easy to buy a holiday home and get all the tax breaks of a holiday let. As an example, they can be exempt from paying business rates, by stating they intend to let their property out for a certain number of days a year. They don’t actually even have to do so, they just need to show they’ve tried!

Solution: Lets even up the legislation across all second homes and make the rules around being entitled to the business rates discount much stricter.

Where will that leave the private rental market?

Have I talked myself and landlords out of a business?!
Not at all. We have too many of the wrong people clogging up the private rentals market. By addressing the issues above, this market is then back to doing what it does best. Private rented properties will once again support the more transient type of renter who needs a property for 1-5 years.

I appreciate all this is easy to say and far harder in practice to implement. But the Cornish Housing Crisis can’t continue to be kicked down the road. It needs addressing now before the county loses all its skilled workforce and becomes one big retirement, or second home destination.

Do you have any solutions that I’ve missed? Please let us know. You’re welcome to comment below, or contact us directly.

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The Housing Crisis in West Cornwall

Housing crisis West Cornwall

10 days ago, I posted a quick article on our business Facebook page about the stamp duty holiday and how in my opinion its fuelled the housing crisis in West Cornwall. I had no idea that this little article would make such big waves.

So here it is – A Housing Crisis in West Cornwall

The Stamp Duty Holiday

The upside of the stamp duty holiday is that our economy has been given a quick adrenaline shot in the arm. Just about every popular tourist area of the country, especially here in West Cornwall, has seen a stampede of potential house buyers.

The downside is that a lot of these properties are going to second home owners and with the demand massively outstripping supply, prices have gone through the roof.

The effect on the Hayle rental market

This means that there’s now even less residential rental properties on the market than ever. For every 2 bedroom terrace house in Hayle we advertise, we get around 100 enquiries in 24/48 hours.

Second Homes and Holiday Lets Property Owners

Don’t get me wrong, I’m not criticising the second home buyers. Let’s be honest, most of us would do the same if we had the money. Its not their fault and in a lot of ways these cash rich buyers help keep a lot of smaller local businesses afloat.

What we need now to reduce the housing crisis in West Cornwall

But we desperately need more affordable housing stock for locals. Probably with caveats for resale to ensure the properties stay in local hands and stays affordable.

And finally…….

I’ve been thinking about this situation more since my article and to me there are actually three things that need to change before we can begin address this housing crisis:

  1. Lots of genuinely affordable housing stock for locals to buy. And I mean affordable. A slight discount off a £300k house is not going to work in West Cornwall, especially considering most people here are earning on, or just above the minimum wage.
  2. Many many more Council Houses/Social Housing. Cornwall is one of the poorest counties in the country and a huge swathe of the population will never be able to buy their own home but they should still be afforded the dignity of a forever home.
  3. A hefty tax on second homes that are bought for personal use and properties bought as a holiday lets. I know this one will be contentious, as holiday lets are needed. After all we’re a county that heavily relies on tourism, so I’m not suggesting biting off the hand that feeds. But the situation has got out of hand and until some cold water is thrown on this particular fire, the housing crisis in West Cornwall will only get worse.

What are your thoughts? Please feel free to comment below or contact us directly: 01736 755077

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The Pandemic impact on the West Cornwall Property Market

Working from home

Lifestyle changes

The pandemic has affected all our lives. However, the changes to the way everyone has had to live means that the pandemic has also had a huge impact on the West Cornwall property market.

Because businesses have had to adapt to three lockdowns and social distancing, this means its now easier than ever to work from home. With home being wherever you want. Many property owners living in landlocked urban areas, have then started to wonder whether they can live somewhere beautiful, like Cornwall. This combined with the stamp duty holiday, has meant that demand for properties in West Cornwall has soared since the autumn of 2020. This in turn has created the inevitable price rises, as demand far outstrips supply.

Is the Pandemic impact on the West Cornwall property market going to last?

Who knows if this trend will continue. Cornwall, especially the deepest darkest West, is not for everyone. After all, ‘dreckly’ isn’t just a word, it’s a way of life down here. Its certainly not a shoppers paradise, thankfully! And it rains – a lot. You need to love outdoor life, in all weathers and making your own entertainment.

This means that there may be some bargains in a couple of years’ time. Some People may realise that they’ve bought in haste and that whilst Cornwall is great for a holiday, its not somewhere they want to live. This will be especially true if they need an income.

For those of us that still have the battle wounds from the 15% interest rates and price crash of the early 90’s, we’re probably more cautious and see this as a bubble that’s going to burst. But I for one have been wrong before, so who knows what the future of the West Cornwall property market will be. Oh for that crystal ball!

Coming next

Over the next few articles I’ll be taking a snapshot view of what you can buy at key price points in St Ives, Hayle and Penzance. Its unlikely at the moment but I may unearth the occasional bargain too. So watch this space.

Get in touch

I’d love to hear your thoughts on the West Cornwall property market. What do you think will happen in the next couple of years. Please comment below or drop me an email.

If you’re considering becoming a landlord or need advice about the rental property market in West Cornwall, please either Contact Deborah or John at CAM Residential Lettings in Hayle or take a look at our FAQ page. Or why not give us a call on: 01736 755077

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How Have Cornwall Property Prices Changed In June 2020 Compared With June 2019?

Hayle Properties

Below are the June 2020 Cornwall property prices. Followed by a breakdown of price changes in Hayle, St Ives and Penzance compared to June 2019.

This first table below displays the average Cornwall property prices for the different types of properties. The second table displays the number of properties sold each month in Cornwall.

3 month moving average Cornwall property prices by property type.

Property TypeJune 2019June 2020% Change

Number of properties sold in Cornwall

Property TypeJune 2019June 2020% Change

In future months I’ll also provide the property prices stats for Hayle, Penzance and St Ives but as June is the latest data available and is the month the industry had just come out of lockdown, the figures are too small to analyse accurately.
It is however, a good benchmark to document how much the property market has managed to recover in the second half of the year.

As we don’t yet have the average sold prices for anything later than June, I thought it would be interesting to look at the current average asking price in September 2020 compared with September 2019. I’ve broken this down for you by number of rooms for Cornwall, then Hayle, Penzance and St Ives specifically.

Asking Cornwall property prices by number of bedrooms

Number of roomsSeptember 2019September 2020% Change

Asking property prices by number of bedrooms – Hayle

Number of roomsSeptember 2019September 2020% Change

Asking property prices by number of bedrooms – Penzance

Number of roomsSeptember 2019September 2020% Change

Asking property prices by number of bedrooms – St Ives

Number of roomsSeptember 2019September 2020% Change

Clearly, as we’ve come out of lockdown the property prices market influencers have been:

  • Less properties on the market than people wanting to buy.
  • The stamp duty holiday.
  • Many city dwellers wanting to move, or have second homes near our gorgeous beaches.

Only time will tell whether these asking prices translate into sold property prices. My guess is that this bubble will burst early in the new year. But then I’ve been wrong before, so watch this space!