Slashed prices and desperate sellers: inside Cornwall's flooded second homes market
For the past 11 years, Debbie Pugh-Jones has owned Napier Cottage, a two-bedroom property overlooking a river in the quiet village of Golant near Fowey in Cornwall.
'It was a dream of mine to go and live by the coast, and when I found this cottage, I thought it was perfect,' she says. Lying at the mouth of a deep estuary, close to the open sea, Fowey is a pretty harbour town with narrow streets winding through the town near the water's edge.
Counted among some of the Cornish coastline's hotspots, it's long been popular with wealthy second home owners; in the past, this kind of property would have been snapped up.
Keen to move nearer to her son in Bath, Pugh-Jones put Napier Cottage on the market last August for £425,000. There were no bites.
Since that time, the asking price has been reduced first to £375,000 and now to £350,000. Still, no one has come forward to buy it. 'During Covid, I could have sold it for £440,000. I'm now on my fourth estate agent and, since August, I've only had three viewings and no offers.'
She lives in the house full-time, but it would make a perfect holiday home – and therein lies the problem. 'The trouble is that there are just no buyers,' she adds.
'First, there was the general election, then the Budget in the autumn and now all the increased taxes. It's not an expensive house, but the wind is blowing in the wrong direction for second home owners. When I speak to others in the village, a number are thinking of selling up.'
Cornwall is sometimes called the 'second home capital of England'. In Poluran, a village close to Pugh-Jones's home, more than half of houses are second homes or holiday rentals, according to research last year from the Lanteglos by Fowey parish council.
The attack on second home ownership has come thick and fast in recent months. In last year's Budget, buyers of second homes were hit with a 5pc stamp duty surcharge, up from 3pc. In addition, the furnished holiday lettings tax regime, which gave tax breaks to landlords who rented out fully furnished properties, was removed this year. This means that those properties which once attracted 10pc capital gains tax now meet the standard CGT rate for residential property, currently 24pc.
Finally, and perhaps most punitive, Cornwall council (like others) now makes second home owners pay double council tax, a move that was also introduced in April. (There is a 12-month exemption for those actively marketed for sale or let, which some experts have suggested is a loophole that homeowners are using to avoid the tax rise.)
'Flooded market'
Justin Knight is a senior valuer at The Property Shop, the estate agency in Fowey that is marketing Napier Cottage. It has two other offices in mid-Cornwall: Bodmin and Lostwithiel. While those two are operating in a normal market – that is, neither location is dominated by holiday homes – it is in Fowey where properties are not selling.
The same is true in two other holiday home favourites: St Ives and Carbis Bay, says Vicky Jones, of estate agent Keller Williams. She describes a 'marked increase' in the number of second homes and holiday properties coming to the market. Kevin James, of Bradleys estate agents, says supply is up 22pc since May 2024. He believes that Cornwall's property market is entering a new phase as tax reforms 'begin to reshape the second home landscape'.
Many agree. 'Fowey is a pretty sailing town, not a working fishing port which functions throughout the year, and the impact has been noticeable since the measures were announced last year,' says Knight. 'People who paid 'Covid prices', when the rush from towns and cities that saw prices here leap in some cases by up to 20pc, are reluctant or can't afford to sell at today's values. And now that the market is flooded with houses for sale, there's a double knock-on impact.'
Figures from Rightmove show that properties in Fowey take five more days to sell this year compared to 2024, and that prices have slipped 1.5pc in the last year.
Truro-based estate agent Ian Lillicrap of Lillicrap Chilcott keeps a keen eye on second home hotspots both within and beyond his patch, including the Cotswolds. 'The market is flooded in all the obvious areas. It's clear that many who bought properties to rent as holiday homes took out mortgages when rates were low and when they could offset the costs against returns.' Interest rates since then have of course risen, and now they face lower demand and much higher costs. 'They've had a culture shock and a rude awakening.'
'Fabulous bargains'
This fall in demand has mainly hit the middle of the market; those at the top end can afford to wait it out – and pay the increased council tax. Jonathan Cunliffe, who runs his own agency, says at the top end of the market it's back to normal after the frenzy of the pandemic. 'There aren't many owners who need to sell at any cost. Most will wait until the market recovers, so it's difficult to see a complete collapse in prices.'
James says that while those who relied on tax efficiencies to make ownership viable are selling up, those prepared to weather 'short-term policy headwinds' will continue to invest.
It is properties valued between £250,000 and £700,000 that have seen the highest drop in enquiries, says Philip Norgan of Smart Estate Agent in Penryn. Some clients are adjusting their prices, but others are holding firm 'because they can't afford to go as low as necessary'.
Lillicrap says there was a flurry of properties looking to exchange before the changes came in at the end of March, with a particular keenness from those in 'old money' areas such as Rock in north Cornwall. Some of these owners have had the house in the family since the 1960s and have seen a huge gain in value in the intervening years. A house that was worth tens of thousands might now be several million, attracting a significant tax bill in its wake.
Figures from Lillicrap Chilcott paint a picture of how the market has shifted. Of the last 60-odd properties sold since early April, 66pc have been to local buyers moving within Cornwall. In 2022, that figure was 50pc. Second home buyers have dropped from 25pc in 2022 to just 14pc. 'As I see it, those buying a second home with their head rather than heart will find it a lot less attractive than it was 18 months ago,' says Lillicrap.
For those with the means to buy, vendors are ready to sell. Lillicrap has just taken on a two-bedroom apartment by the marina in Port Pendennis in Falmouth. 'The owner said that only a few weeks ago she would have asked £600,000, but as she's in tune with what's happened across the nation, she's putting it on the market for £499,950,' he says.
'There are some fabulous bargains to be had,' adds Clare Coode, of buying agent Stacks Property Search. 'Canny agents are aware of this, and I have never seen more off-market opportunities than I have this spring.'
At the top end of the market, buyers are enjoying what Josephine Ashby of John Bray Estates calls 'a rare abundance of choice and a selection of property that may not reappear on the market for generations' as owners reduce prices. And people are still buying, such as those who snapped up an off-market clifftop property in Polzeath on the first viewing.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
42 minutes ago
- The Sun
My new manager is destroying my confidence with micro-management & bad communication
APPRENTICE star and West Ham United vice-chair Karren Brady answers your careers questions. Here, Karren gives advice to a reader who wants to negotiate a fair redundancy after 20 years at her job. Q: For the past three years, I've worked in change communications. It was my perfect job and enabled me to thrive. Unfortunately, my employer got rid of my position and sent me back to a previous role in a different department, which I now find difficult. I'm currently on the waiting list for a neurodiversity assessment. I've told my new manager this, but they don't understand and work in a way that makes things a struggle and affects my focus. They also aren't very clear in their communication and they micro-manage me – even asking me about personal appointments in my calendar. I want to move forward – whether in this company or a different one – but my confidence is being knocked every day. Do you have any advice? Amber, via email A: It doesn't sound like your employer is supporting you or playing to your strengths. The Apprentice's Karren Brady gives career advice in game of Have You Ever? Request a meeting with your manager to calmly explain how the current set-up is affecting your ability to do your best work. Be specific about what's difficult, such as micro-management, unclear instructions and being questioned on personal matters, and how this is affecting your focus and confidence. Then explain what you need instead – more clarity, trust and autonomy. It's also worth sharing how much you thrived in your previous role and why. At the same time, speak to occupational health or HR about your neurodiversity assessment, as you may be eligible for reasonable adjustments. while at work. Keep a written record of concerning interactions, and don't stop advocating for yourself. Whether it's within this company or somewhere new, you deserve to be in a role and environment that supports your needs and allows you to grow.
The Guardian
an hour ago
- The Guardian
UK government unveils £275m investment in training and apprenticeships in Ebgland
The government will present a £275m investment in technical training and apprenticeships as the centrepiece of its long-awaited industrial strategy, in a direct challenge to Nigel Farage's growing influence in England's manufacturing heartlands. The package, announced by the business secretary, Jonathan Reynolds, on Sunday, includes funding for new technical excellence colleges, short courses in artificial intelligence (AI) and digital manufacturing, and major capital upgrades to training providers across England. It aims to tackle longstanding skills shortages in engineering, defence and high-growth sectors such as battery production and advanced manufacturing. Officials said the new strategy was designed to 'end the overreliance on foreign labour' and ensure a pipeline of domestic talent for critical industries – a move clearly aimed at countering Farage's narrative of national decline and reclaiming the industrial vote in traditional Labour strongholds. While the £275m pledge is not a full industrial funding package – and falls short of sector-wide subsidies or energy cost changes – it is being positioned by ministers as the first concrete step in a broader 10-year plan for growth. The full strategy, due to be published this week, will also include a new trade strategy focused on exports, supply chains and making the country 'the best-connected place in the world to do business'. Reynolds said the skills funding marked a shift away from decades of managed decline. 'Our modern industrial strategy will be powered by investing in British people,' he said. 'It will help transform our skills system to end the overreliance on foreign labour, and ensure British workers can secure good, well-paid jobs in the industries of tomorrow and drive growth and investment right across the country.' The announcement comes as Reform UK intensifies efforts to peel off Labour voters in post-industrial seats, with Farage promising to restore manufacturing and impose tougher immigration rules. While Labour has promised a broad 'plan for change', the industrial strategy has been delayed for months as ministers wrestled with how best to rebuild support in regions hit hardest by automation, outsourcing and underinvestment. The timing now is deliberate – a policy-heavy counteroffensive in the so-called red wall, where Reform UK has surged in recent polling. The skills package responds to a stark reality: one in seven young people are not in education or employment, and the number of apprenticeships has fallen by nearly 20% since 2016. The education secretary, Bridget Phillipson, called the strategy an 'economic and social reset'. 'Skills rightly run right through the heart of this industrial strategy because they are key to breaking the link between background and success for young people,' she said. The strategy builds on previous announcements, including a £187m package for AI training announced during London Tech Week and a £3bn apprenticeship fund to create 120,000 places in healthcare, carpentry and construction. But the scale of new funding is modest – about £275m spread over four years, including roughly £200m for infrastructure and course delivery – and Labour may face pressure from industry and unions to go further in reforming the apprenticeship levy, immigration skills charge and energy costs for heavy industry.
The Independent
an hour ago
- The Independent
Starmer puts skills training at heart of industrial strategy plan
Sir Keir Starmer will set out his industrial strategy on Monday as he seeks to kickstart the stuttering economy and reduce the UK's reliance on foreign workers. The decade-long plan for 'national renewal' will include £275 million in skills investment to train Britons to do jobs in growth industries which might otherwise require imported labour. The strategy will include specific funding to train people for work in defence, engineering, digital and construction roles. Business Secretary Jonathan Reynolds said the strategy 'will help transform our skills system to end the overreliance on foreign labour and ensure British workers can secure good, well-paid jobs in the industries of tomorrow and drive growth and investment right across the country'. Monday's industrial strategy will be followed later in the week by a new trade plan intended to make the UK the best-connected country in the world to do business. The Prime Minister will launch the industrial strategy hoping it will help in his mission of delivering economic growth. The economy shrank by 0.3% in April, the biggest monthly contraction in gross domestic product for a year-and-a-half, as businesses felt the impact of global uncertainty caused by Donald Trump's tariffs and domestic pressure as a result of hikes to firms' national insurance contributions. Around one-in-seven young people are not in education or employment, and the number of people taking an apprenticeship has fallen by almost a fifth between 2016/17 and 2023/24. The Government hopes the growth sectors identified in the industrial strategy will create 1.1 million new jobs by 2035. The skills package includes capital investment from a £200 million fund which will support new facilities including 'technical excellence colleges' providing specialised training for local industries. The total funding is expected to train thousands more workers by 2029 including computer programmers, IT technicians, electrical and civil engineers. Education Secretary Bridget Phillipson said: 'Skills rightly run right through the heart of this industrial strategy because they are key to breaking the link between background and success for young people and delivering prosperity for our country.' Stephen Phipson, the boss of manufacturers' organisation Make UK, welcomed the skills announcement. 'We look forward to working with the Government to fix the skills gap in manufacturing, which has been the sector's Achilles' heel for decades,' he said. Other elements of the plan are expected to include measures to help cut energy costs for industries which have complained they are being forced to compete with rivals overseas who face lower bills. Meanwhile some £380 million will be spent on a range of projects intended to double private investment in the creative industries. Shadow business secretary Andrew Griffith welcomed the investment in skills but said 'the Government are stepping on the accelerator and the brake at the same time' by hiking national insurance for firms and introducing extra employment rights which could increase costs. 'This inherent contradiction cannot make for a feasible or serious strategy, and will hold the Government to account for it,' he said.
