Wealthy second home buyers from Cheshire and the West Midlands are still active, according to estate agents. The extra taxation is “an ouch but not a deal breaker” for buyers from Knutsford currently buying a home for £1.5m in Borth-y-Gest, a pretty seaside village near Porthmadog in Gwynedd, says David Lewis of Garrington Property Finders.
“Anglesey, Abersoch, Porthmadog and Cricciech are all popular; buyers see these property markets as recession-proof places to invest.”
Elvins reports that buyers are spending £1m plus on the Llyn Peninsula, especially Abersoch, also in Gwynedd.
“Yes, there’s 4pc extra stamp duty and 150pc council tax on a second home but some people want easy access and are sick of airports,” he says. “Buyers are from Cheshire, Manchester, Shopshire and the Midlands.”
He has just sold a four-bedroom bungalow in Abersoch at £875,000 to a second home buyer – with £83,700 stamp duty payable on it and council tax of £6,745 per year.
The average property sale in Gwynedd is £208,760, up 2.8pc in a year, according to the Office for National Statistics. In the Anglesey/Snowdonia areas, Mike Williams of Beresford Adams is also seeing buyers coming from affluent areas of Cheshire but says ‘buy to holiday let’ is not dead – even at the £200,000 to £300,000 level which buys a two/three-bedroom home.
“An investor bought a two-bedroom home in Bethseda for £130,000 where there’s strong demand for holiday lets, and rents it out for £120 per night, rather than £500 per month as a long-term let. Even with the extra taxes, the numbers can still stack up.”
The rise of Cornish first-time buyers – as second homes fall
Cornwall is often seen as a bellwether of the wider second homes market, according to David Fell of Hamptons. His number crunching found that while the proportion of these properties sold has halved in a decade, the number of first-time buyers in Cornwall is increasing – and sharply since 2022.
Katie Warren of Fixer Management Services, a holiday-let buying agent and property manager, says a lot of people who jumped onto the holiday let boom after Covid – when the percentage of second homes slightly spiked – are now trying to get out of it because year-round rental income isn’t assured in spots like Rock, Padstow and Polzeath.
“These buyers didn’t really understand the lettings market, and now, faced with higher mortgage rates, steeper maintenance costs and extra taxation, they are certainly not ‘living the Cornish dream’,” she says.
For new investors, the substantial costs of setting up a holiday let are a deterrent, plus the prospect of further penalties. Already there’s the higher stamp duty on second homes, the 100pc council tax premium on Cornish second homes from 1 April 2025, and the removal of tax breaks for furnished holiday lettings from the same date.
But she says some people are still buying to let – namely in Falmouth, where demand is less seasonal than elsewhere in the county, catering to tourists as well as dock workers, and Penzance, which is undergoing extensive regeneration. In the former, she has a client who has just exchanged on a one-bedroom property for £230,000.
The atrocious weather this spring and summer has not helped holiday bookings and the second homes market, says Claire Whisker of First in the Door, a property advisor platform matching homeowners to buying agents.
“First-time buyers, on the other hand, feel that rate cuts are due and this may lead to prices recovering so they don’t want to wait,” she added. The average price in Cornwall has fallen 2.8pc in the last year, according to the ONS.