Cornwall Area Guide

 Your free guide to Property Investment in Cornwall

In our downloadable guide, we’ll explore the various factors influencing the local property investment market, including:

• Cornwall’s economy

• Inward investment in Cornwall

• Regeneration plans for Cornwall

• Economic growth in Cornwall

• Tourism in Cornwall

• Tourist market data

• Bude

• Cornwall’s housing market

• Housing supply

• Rental yields

• Buy-to-let investment in Cornwall

• Property market predictions

Please download your FREE guide to property investment in Cornwall by completing the form below

Why Invest in Cornwall? A Summary

Property investment in Cornwall is a very different proposition to that of most other regions. Until recently, its appeal has been predicated mainly on the popularity of its visitor economy.  Rental demand is often driven by visitors from outside the region - from:

• British tourists

• Foreign tourists

• Newly retired people

• People seeking to move from big cities

The largest source of demand is the droves of tourists who travel here to take advantage of Cornwall’s beautiful beaches, coastline and countryside. Newquay, for example, will typically expect its population to rise in peak season from around 22,000 to well over 100,000.

However, home-movers represent an increasingly important force. Since the Covid pandemic, there’s been a surge in demand from people seeking to move out of big cities and into more rural areas. In March 2021, The Guardian reported that “Cornwall has replaced London as the most searched-for place to live on the property website Rightmove, as the coronavirus pandemic sparks a new era of flexible working and lifestyle changes.”

With a general shortfall in accommodation being evident in most tourist areas, this makes it very much an investor’s market.

• The UK’s most searched-for location amongst home-movers

• One of Britain’s most popular tourist destinations

• A growing domestic population

• Restricted supply of tourist accommodation

• Lower investment costs than many other parts of southern England

• Fast-rising capital values

• Excellent rental yields

Inward Investment in Cornwall

Many of Cornwall’ best-known investments relate to tourism. For example, the Eden Project was launched in 2001 and quickly established itself as one of the area’s most popular tourist destinations. However, investment isn’t only about the visitor economy, and local planners are now laying the foundations for higher-value, tech-based industries.

Important investments include:

• The creation of three innovation centres, supported by the University of Plymouth and designed to nurture growth in the creative, tech and media industries, as well as the environmental and health sectors.

• The establishment of three enterprise zones, specialising in marine enterprise, aerospace and satellite communications.

• The creation of development space for higher-value industries including advanced manufacturing.

Regeneration Plans

A key player in the county’s regeneration is Cornwall and Isles of Scilly Local Enterprise Partnership (CIOS LEP).  Between 2014 and 2016, it secured over £78 million to support economic growth. The funding is now driving numerous regeneration and infrastructure improvements that, collectively, are expected to create 5,000 new jobs. Notable examples include:

• Numerous highway, rail and public transport improvements.

• West Cornwall Transport Interchange: a new bus/rail interchange.

• Newquay Growth Area: transport improvements connecting to the Enterprise Zone at Aerohub at Newquay Cornwall Airport.

• Superfast Broadband Extension: a scheme that has given Cornwall over 99% fibre broadband connections, making it the best-connected rural place in the UK.

Ongoing projects include:

• Deep Space Communication: a collaboration between Goonhilly Earth Station and the European Space Agency.

• Spaceport Cornwall Infrastructure: a newly planned horizontal satellite launch site at Cornwall Airport Newquay.

• Hall for Cornwall QuayWorks: a new creative tech hub that will create a new cluster within the digital and creative economy.

• The Porthleven Business and Community Park.

Cornwall – an Overview

Cornwall is the most south-westerly county in Britain. Largely rural in character, it has a relatively low population density and it has only one city: its administrative centre, Truro.

As a peninsula, it has both a northern coast, which meets the Atlantic, and south coast, which meets the English Channel. This gives it a considerable span of coastline; a scenic mixture of cliffs, coastal paths, woodland, beaches, historic ports and fishing villages. Their appeal is heightened by the presence of the Gulf Stream, which makes this one of the warmest and sunniest regions of Britain.

Cornwall is ideally suited to tourism, but poorly suited to the sorts of industries that normally prioritise strategic central positions on the UK motorway network. Consequently, much of its economy is predicated on relatively low value sectors, and average earnings are well below the UK average. Conversely, however, its comparative remoteness and lack of urban development have made it extremely popular amongst holidaymakers, retired folk and home-movers.

Economic Growth

The LEP and other stakeholders are making important strides towards reinventing the county’s economy. In 2019, a coalition of local organisations created the South West Institute of Technology, which seeks to create state-of-the-art facilities for training in technical subjects. Partners include the University of Exeter, the University of Plymouth, various local colleges, and employers such as Goonhilly Earth Station and the Met Office.

In addition, organic growth on the part of local employers is helping the region’s revival. The last two years have seen healthy growth in sectors including broadband connectivity, food, mining, digital, sports, communications, engineering and more.

This is important for property investors because if more local residents secure higher-paid jobs, so their average spending power will gradually improve. Better employment prospects also tend to attract more residents, of course. This all helps to raise demand for rental accommodation and puts upward pressure on rental values. Similarly, any improvement in average living standards will also tend to drive house prices higher.

For now, however, economic growth is less of an influence on investment prospects than the local tourism industry.

Tourism in Cornwall

Tourism is one of the county’s biggest industries, accounting for well over £1.5 billion per annum, 4.5 million visits, and around 20% of all local jobs.

Cornwall boasts some of Britain’s best beaches and, without doubt, some of its best weather. As a largely rural county, it’s also immensely popular amongst walkers and those who simply want to escape the everyday madness of city living. Whether for a short family break, a second home or for permanent retirement, Cornwall represents the quintessential getaway.

In 2019, before the onset of the Covid pandemic, local tourist professionals were witnessing rising interest from key markets such as the United States, and expecting ongoing growth in the tourism sector to create 8,000 jobs. Of course, the pandemic scotched any immediate growth ambitions but the same longer-term expectations hold good. With the global vaccination programme rolling out, many expect tourist activity to return close to normal by 2022, and in the meantime, local hospitality businesses are looking forward to a year of strong domestic demand.

In any event, Cornwall’s future looks good. The pandemic prompted many Britons to become first-time visitors in 2020 and that could launch lasting family traditions that boost domestic demand long into the future. Moreover, in 2022 and beyond, international travel is likely to reopen more generally and all of Cornwall’s historic strengths should return to the fore.

Tourist Market Data

• Cornwall is consistently voted Best UK Holiday Destination

• Bude (in Cornwall) is consistently voted Best UK Coastal Resort/Town

• In 2018/19, across the county, there were 4.8m staying visitors and 14.7m day visitors

• 68% of visitors lived outside the South West, and 8% were from overseas

• Tourism contributed to £2.8 billion of business turnover in the county economy and supported 54,000 jobs

• 88% of respondents to the Cornwall Visitor Survey had visited Cornwall before

• 38% of all multi-day visitors stayed in self-catering accommodation

• 26% used serviced accommodation

• The average overall length of stay was 7.18 nights

• Cornwall scored very highly for categories including shopping, eating & drinking, places to visit, quality of the beaches, parks/open spaces, nightlife/evening entertainment, and a feeling of welcome.

Source: Cornwall Visitor Survey 2018/19

Bude

Bude is a good example of a typical Cornish tourist destination. According to Visit Bude, it was the subject of 142,600 staying trips in 2017, of which just 8,500 originated from overseas. Like many other local resorts, it received the great majority of bookings from domestic holidaymakers.

• 16% stayed in serviced accommodation

• 33% stayed in self-catering accommodation

• 22% stayed in tents/caravans

• 18% stayed in holiday centres

Cornwall’s Housing Market

There is considerable inequality across the county, and that has been evident in the way prices have moved. In economically disadvantaged areas, job losses and the rising cost of property have led many permanent residents to feel financially hard-pressed. As consumer sentiment falls, so average values tend to dip in sympathy, so some areas have seen dips in average property values.

However, in many tourist-friendly locations, and in neighbourhoods favoured for second homes, the reverse has been true.

The Covid pandemic prompted tens of thousands of city-dwellers to revaluate their living arrangements. The result has been an exodus in the direction of Cornwall. In March 2021, Rightmove declared the county the most searched-for place in Britain, noting that “flexible working and lifestyle changes … have fuelled a surge of interest in relocating to rural locations.”

Cornwall has evidently been at the top of many people’s wish-lists, and average values have responded. Some of the recent regional winners have included:

• Padstow - £111,250 increase

• St Agnes - £65,000 increase

• Port Isaac- £62,500 increase

In short, while the market for conventional AST rentals looks unspectacular, the short stay tourism market seems set to deliver strong gains in the coming years.

Please download your FREE guide to property investment in Cornwall by completing the form below