The classic dream of swapping your family home for a little place on the coast is going strong.
A new study of the top locations in England and Wales for “upmarket downsizers” – those fortunate, affluent homeowners who have a (too) large family home to sell – is dominated by seaside locations.
The report, by consumer intelligence company CACI, found that the number one place for older buyers to purchase their final home is Fylde in Lancashire – the borough that includes the sought after seaside town of Lytham St Annes, which is a mecca for golfers.
Almost as popular as Fylde are two classic south of England seaside resorts – Eastbourne and Bournemouth, which take second and third place in the CACI study.
Lytham St Annes has seen significant price rises in the last year. Average prices today are £211,573, up 5.45 per cent in the past year.
Lytham St Annes is in fact two towns that have slowly merged, but which retain individual characters. Lytham, on the estuary of the River Ribble, is the slightly smarter option, with some lovely Georgian property and a characterful town centre.
“It has got a nice market town feel. There are lots of boutiques and galleries as well as the normal chains and lots to do,” said Darren Sellwood, branch manager of estate agents Entwistle Green.
This includes a busy programme at the Lowther Pavilion, an annual arts festival, and an annual beer festival.
St Annes has more of a seaside feel with a sandy beach and a Victorian pier. It also has a good range of shops, restaurants and cafes thanks to its status as a tourist town. It also has four championship golf courses, notably Royal Lytham and St Annes, venue for the Open Golf Championship.
In terms of property buyers in Lytham could pick up a pretty town centre cottage, with three bedrooms, for between around £250,000 and £300,000. Alternatively a modern two bedroom apartment with views of the river would cost around £200,000.
In St Annes you could buy a two bedroom cottage for between £140,000 and £150,000, or a sea view apartment with a balcony and two bedrooms for around £200,000. A two bedroom bungalow, semi-detached, would be priced at around £125,000 and £150,000.
The market in the area is picking up according to Sellwood, who has noticed more buyer activity. But, he says, homes for sale still outnumber buyers, which means that prices are not rising uncontrollably.
In Eastbourne, East Sussex, prices have risen 5.58 per cent in the last year, to an average £233,427.
Eastbourne possesses a reputation as a mecca for oldies, but Kieran James, branch manager of Freeman Forman estate agents, says that its demographic has been changing over the last decade, as young families squeezed out of south east London, Surrey, Kent and other parts of Sussex Move in.
“There is lots going on,” he said. “We have got the tennis, several theatres, lots of cafes and restaurants and you can be at London Victoria within around an hour and a half.”
Eastbourne also passes the green space test with lots of parks and great access to the South Downs National Park, as well, of course, as six miles of shingly beachfront.
Property is very affordable. James estimates you could buy a modern flat (two bed) close to the harbour from between £150,000 to £200,000, a period flat in The Meads, a sought after suburb, for between £220,000 and £250,000, or a two bedroom cottage in the old town for around £225,000.
Another traditional retirement hotspot is Bournemouth, where average property price stand at £248,266, up 4.22 per cent in the last 12 months.
The crowning glory of this Victorian town is its fantastic stretch of white sandy beaches, which stretch from Sandbanks through to Christchurch, backed by dramatic cliffs.
Like Eastbourne its old codgers reputation is rather unfair since the average age of its population is, according to the latest Census, a sprightly 40.
And its popularity as a seaside resort means there is stacks to do, with major concert venues, a museum, some great public parks, interesting shops and even its own Symphony Orchestra.
The town has a good programme of festivals, including ones dedicated to food and drink and another to music, dance, film, theatre and literature, while the area is ideal for sailing and surfing.
Keith Fensom, an associate director at estate agents Savills, said homes on Bournemouth’s cliff top overlooking the sea were perennially popular.
A two bedroom flat in an older block would cost from around £220,000, but could stretch up to a £1.5m for a glitzy penthouse.
Of course, cliff top living is not for all – to get to the beach one must negotiate a zig zag path, and while walking into the town is a breeze there is an uphill walk home.
A more restful option would be to live in Bournemouth’s smartest suburb, the leafy and lovely Talbot Woods, where a three bedroom detached 1930s house would cost from about £500,000.
Alternatively a modern, low maintenance two to three bedroom townhouse in the town centre would cost between £250,000 and £350,000.
Fensom said that, thanks to the perennial appeal of Bournemouth to downsizers, the market over the last 12 months has finally shaken off the recession.
“There is a lot of activity,” he said. “If you have a property that is correctly priced and under £1m then you are often seeing competitive bidding for it.”
1. For a glamorous retirement, downsizers could buy a fabulous three bedroom penthouse in Bournemouth for £1,195,000 and enjoy panoramic sea views.
2. Or traditionalists might prefer a Grade II listed, three bedroom cottage, which could be yours for offers over £280,000.
3. Eastbourne also offers penthouse living. A three bedroom home with great views of beach and sea is on the market at £695,000.
4. A three bedroom farmhouse in Lytham St Annes is a manageable size yet large enough for friends and family to stay over. It is on the market at £475,000.
5. Alternatively, a three bedroom flat in a converted manor house could be yours for £249,950.
The number of mortgage applications that are rejected looks set to increase as banks tighten their lending criteria, a report suggested today.
Banks and building societies predict there will be a significant decrease in the number of mortgage applications they approve during the third quarter, according to the Bank of England’s latest Credit Conditions Survey.
Lenders said some of the fall would be driven by the tighter lending rules that were introduced under the Mortgage Market Review towards the end of April.
But others said they were also planning to tighten lending standards on large loans with high loan-to-income (LTI) ratios.
“there is still no need for the Bank of England to intervene and introduce a cap”
Government-backed banks Lloyds Bank and Royal Bank of Scotland have already capped the maximum LTI they will advance to people borrowing more than £500,000 in London to four times their pay.
Chancellor George Osborne also recently announced he was giving new powers to the Bank of England to enable it to cap the value of loans relative to incomes, following concerns that the property market could be over heating.
Lenders said that while they did not expect to change their maximum loan to value (LTV) ratios in the third quarter, they did expect maximum LTIs to fall slightly, the first time they have predicted this since the first quarter of 2012.
But despite tightening LTIs, lenders do not expect to change their credit scoring criteria.
Jonathan Harris, director of mortgage broker Anderson Harris, said the survey showed that the mortgage market was correcting itself and the Bank of England did not need to intervene by imposing a cap.
He said: “While maximum LTV and loan to income ratios increased in the second quarter there is still no need for the Bank of England to intervene and introduce a cap.
“Lenders already expect the former to be consistent in the next quarter and for the latter to actually fall so the market is correcting itself, without the need for external interference.”
Overall, lenders said the availability of mortgages had increased slightly during the three months to the end of May, as they looked to expand their market share, continuing the trend seen during the past two years.
But this upward trend is expected to end during the third quarter, with lenders predicting mortgage availability will be unchanged, partly due to their lower appetite for risk.
As the housing market continues to recover, lenders reported that demand from people buying a property had increased “significantly” during the three months.
This trend is expected to continue during the third quarter.
There was also strong demand from people remortgaging.
The number of people defaulting on their mortgages fell significantly during the second quarter, while losses on defaults were also lower.
Lenders expect both the number of people unable to keep up with their mortgages and the value of defaults to continue to fall going forward.
Fears about the housing market overheating led the Chancellor George Osborne to issue new powers to cap mortgages to three and a half times a borrower’s income. If a cap is applied, what properties could a homebuyer on a typical salary afford?
Zoopla takes a look at eight properties with an asking price of £125,000. This is the value of a property that a homebuyer on an average annual salary of £26,910 could afford if a three and a half income multiple is applied. It assumes a deposit of 25 per cent.
1. A studio flat with a shared patio area in London’s Fulham.
2. This Grade II listed semi-detached cottage in Trowbridge offers two bedrooms arranged over three floors.
3. An ex-local authority block in London’s Forest Hill has a two bedroom flat for sale that is in need of modernisation.
4. This three bedroom terrace house in Cornwall’s St Austell comes with a multi-fuel burner and double glazing.
5. Sea views are provided by this two bedroom flat in East Sussex, requiring modernisation.
6. This three bedroom semi-detached house in Nottingham boosts three bedrooms and is set in a popular residential location.
7. A two bedroom second floor flat in the popular Golden Triangle area of Norwich.
8. This three bedroom terrace house in Kent has spacious living and bedroom areas, but is in need of modernisation.
The cost of renting a home increased by 0.6 per cent during May as the returns made by investment landlords hit a four-year high, figures showed today.
The typical property in England and Wales cost £745 a month to rent in May, the highest level since December last year.
But despite the jump, rents have only risen by 1.1 per cent during the past year, compared with inflation of 1.5 per cent, as measured by the consumer prices index, according to LSL Property Services.
The group, which owns the UK’s largest lettings agent network, said it was the twelfth consecutive month in which annual rent rises had been below the rate of inflation.
In absolute terms, the cost of renting a home has risen by just £8 during the 12 months to the end of May.
David Newnes, director of estate agents Reeds Rains and Your Move, part of LSL Property Services, said: “Private renting is becoming cheaper in real terms. May’s latest sub-inflation rent rises will help over nine million tenants.
“To put that in context, this is more than a hundred times as many households as have benefited from Help to Buy in its initial stages so far.”
Landlords continued to make gross yields on a property of 5.1 per cent on average during May, unchanged from April.
But when house price growth was taken into account, along with void periods between tenants, total annual returns on a buy-to-let property soared to a four-year high of 12.2 per cent.
The figure was more than double the total return of 5.3 per cent recorded in the 12 months to May 2013.
As a result, the average landlord has seen a return of £20,133 in the past 12 months, with £8,107 coming from rent and £12,026 from capital appreciation.
Tenant arrears also improved during the month, with arrears standing at 7 per cent of all rent due, compared with 8.2 per cent a year ago.
Rents in seven out of 10 regions of England and Wales are now higher than they were a year ago.
The South West saw the fastest annual increase, with the typical monthly rent 3.9 per cent higher than it was in May last year at £657.
It was followed by the East Midlands, where rents have risen by 3.8 per cent in the past year to £575, and the North West, where they are now 2.3 per cent higher at £584.
But the annual rate at which rents in London are increasing has slowed down to 1 per cent, compared with a peak of 7.9 per cent in early 2013.
Despite this, London still remains the most expensive place to rent a home at an average of £1,124 a month.
Three regions of the country recorded rent falls during the past 12 months, with the cost of letting a home dropping by 3.6 per cent in the North East and by 2.3 per cent and 0.4 per cent in the East of England and West Midlands respectively.