Knight Frank is warning that it will “take time” for the three per cent stamp duty surcharge to be absorbed into the traditional waterfront second home market - and that this may well hit transactions and asking prices in the meantime.
The agency says the surcharge announcement prompted many buyers to bring forward their deals ahead of the April 1 deadline; now with that date passed, the market is likely to stagnate “where there are notable levels of discretionary purchases.”
However, it insists that over the longer term transaction volumes of second homes will rise again as the additional cost is factored in to prices.
In the meantime, Knight Frank says its research of high-performing coastal locations in Cornwall, Devon and Dorset suggest a premium of up to 71 per cent for properties with water views compared to similar properties just one mile inland.
Using data from the Land Registry, based on actual sales volumes going back to 1995, Knight Frank has calculated the annual price performance of individual coastal markets relative to the average price increase across the three counties.
Croyde in North Devon has been the best performing coastal market over this time, with annual outperformance of 4.1 per cent on average. The agency says that over 20 years this equates to cumulative price growth of around 122 per cent above the wider Cornwall, Devon and Dorset area.
Over the past two decades, Croyde has seen prices more than quadruple, by 432 per cent, compared to 310 per cent combined across the three local authorities.
A number of other long-established prime markets including Rock, Salcombe, Padstow and Falmouth feature in the hotspots identified in the research, and have all experienced outperformance of at least two per cent annually since 1995.