Flats in Cornwall - a market ripe for collapse

[Frank Hovis]

I've posted about this on other threads but as I think that this is a particular market sector about to see a big collapse I wanted to track it.

A huge development in Hayle has gone bust and I am aware of work stopping on two other big sites, though one has since resumed.

There are also vast numbers of flats due to come to market from hotels being converted.  From my travels I would say that Newquay has the most number of these being built with Falmouth quite a way back in second place so the figures are for Newquay.

Flats for sale 116.

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^997&propertyTypes=flat&includeSSTC=false&mustHave=&dontShow=&furnishTypes=&keywords=

Of which over £500k: 15.

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^997&minPrice=500000&propertyTypes=flat&includeSSTC=false&mustHave=&dontShow=&furnishTypes=&keywords=

Compares to (showing just how many flats have been built):

Houses for sale: 231.  Flats listings 48% of houses.

Houses over £500k:  54.  Flats listings 28% of houses, both over £500k.

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^997&minPrice=500000&propertyTypes=bungalow%2Cdetached%2Csemi-detached%2Cterraced&includeSSTC=false&mustHave=&dontShow=&furnishTypes=&keywords=

 

What I am expecting to see, here's the prediction, is that those percentages will rapidly go up and up as flats are built but go unsold whilst houses continue to shift.

I will update occasionally.

Enjoy.

[One percent]

4 minutes ago, Frank Hovis said:

I've posted about this on other threads but as I think that this is a particular market sector about to see a big collapse I wanted to track it.

A huge development in Hayle has gone bust and I am aware of work stopping on two other big sites, though one has since resumed.

There are also vast numbers of flats due to come to market from hotels being converted.  From my travels I would say that Newquay has the most number of these being built with Falmouth quite a way back in second place so the figures are for Newquay.

Flats for sale 116.

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^997&propertyTypes=flat&includeSSTC=false&mustHave=&dontShow=&furnishTypes=&keywords=

Of which over £500k: 15.

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^997&minPrice=500000&propertyTypes=flat&includeSSTC=false&mustHave=&dontShow=&furnishTypes=&keywords=

Compares to (showing just how many flats have been built):

Houses for sale: 231.  Flats listings 48% of houses.

Houses over £500k:  54.  Flats listings 28% of houses, both over £500k.

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^997&minPrice=500000&propertyTypes=bungalow%2Cdetached%2Csemi-detached%2Cterraced&includeSSTC=false&mustHave=&dontShow=&furnishTypes=&keywords=

 

What I am expecting to see, here's the prediction, is that those percentages will rapidly go up and up as flats are built but go unsold whilst houses continue to shift.

I will update occasionally.

Enjoy.

Nice one Frank. Are you happy to have examples posted from further afield?    I don’t think there will be a massive crash, compared to the rest of the market, here as they haven’t oversupplied them. There are a few newish blocks around but not over saturation.  Scabby is different so I’ll monitor that. Here, it’s the old hovels round the harbour that are stupidly priced. 
 

This is whitby.  As you can see, the estate agents don’t even know how to enter property on rightmove, there are some houses in here. 
 

https://www.rightmove.co.uk/property-for-sale/find.html?searchType=SALE&locationIdentifier=REGION^1441&insId=1&radius=0.0&minPrice=&maxPrice=&minBedrooms=&maxBedrooms=&displayPropertyType=flats&maxDaysSinceAdded=&includeSSTC=true&_includeSSTC=on&sortByPriceDescending=&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&newHome=&auction=false

[Frank Hovis]

41 minutes ago, One percent said:

Nice one Frank. Are you happy to have examples posted from further afield?  

 

Yes if you see what looks like a big oversupply and stalled block builds.

What I was trying to do by taking one place rather than all of Cornwall was to take out "normal" markets for flats, meaning a cheap residential option in a town as opposed to speculative sea front new build blocks.

If that's Scarborough with speculative builds then yes please track that particular market on this thread.

[Boon]

What is the yield on one of the places if you get a load of asylum seekers in?
It seems to me that this is the easiest 'solution' for having lots of oversupply.

Someone comes in and makes a bulk buy of flats at large discount. rents them out to government tenants.

[Frank Hovis]

18 minutes ago, Boon said:

What is the yield on one of the places if you get a load of asylum seekers in?
It seems to me that this is the easiest 'solution' for having lots of oversupply.

Someone comes in and makes a bulk buy of flats at large discount. rents them out to government tenants.

 

The asylum seekers in a hotel didn't last long in Cornwall, I can't see the government trying that again.

Not that Cornwall is particularly militant but there aren't any big towns and very few ethnics so the asylum seekers stuck out like a sore thumb on top of all the stalking women and school girls that they were doing.

Obviously not every single one of them but a lot of them.

[roundhouse]

Good thread topic Frank. Though I know little about Newquay, not been there for about 10 years. 

Do you think some of the flat build intention is/was to house students who could then travel by train to Penryn, taking some housing pressure away from there? Or more of the same tourism boom bandwagon (which now is over). Or? 

[Frank Hovis]

3 hours ago, roundhouse said:

Good thread topic Frank. Though I know little about Newquay, not been there for about 10 years. 

Do you think some of the flat build intention is/was to house students who could then travel by train to Penryn, taking some housing pressure away from there? Or more of the same tourism boom bandwagon (which now is over). Or? 

 

I can't see any in Newquay being student accommodation tbh.

Whilst there is a plan in place to have straight through trains linking Newquay and Falmouth it isn't in place yet and that's still going to be a long and expensive trip, all the student accommodation is going to be in Falmouth / Penryn IMO.

I hadn't considered that but it's another reason for not selecting Falmouth as any intended tourist blocks could easily be repurposed as student rentals rather than going up for sale.

[Frank Hovis]

Flats for sale 122 (was 116).

Of which over £500k: 15 (was 15).

 

Compares to (showing just how many flats have been built):

Houses for sale: 240 (was) 231.  Flats listings 51% (was 48%) of houses.

Houses over £500k:  57 (was 54).  Flats listings 26% (was 28%) of houses, both over £500k.

 

Listings increasing is standard for the time of year but now over half of listings are for flats.

[BoSon]

All the cheap poorly maintained hotels in newquay have now or are being knocked down for those 'aspirational' apartment blocks targetting holiday home wannabes in London/home counties for their own use or to rent as airb&b as investments.

If that fails they can get the government to pay them for housing the gimmigrants that have been moved out of high profile hotels into lower profile private accommodation. They're sure haven't been moved out of the county, they stand out like a sore thumb against a predominantly white population, especially when it's young men prowling alone or in packs without the family a tourist usually has.

[One percent]

Scabby, looks like they are running for the exit.  First look at the price then the statement below 

https://www.rightmove.co.uk/properties/137049380#/?channel=RES_BUY

Please Note: - The owner of this apartment is also selling five further apartments within The Sands development, there is the option therefore, of purchasing multiple apartments. If two or more apartments were purchased any prospective purchaser would likely be entitled to The 'multiple dwelling relief' and a saving on the Stamp Duty payable.

[Onsamui]

On 22/05/2024 at 11:37, Frank Hovis said:

 

The asylum seekers in a hotel didn't last long in Cornwall, I can't see the government trying that again.

Not that Cornwall is particularly militant but there aren't any big towns and very few ethnics so the asylum seekers stuck out like a sore thumb on top of all the stalking women and school girls that they were doing.

Obviously not every single one of them but a lot of them.

Yes they did.  The AS's used to stand outside Birties in Newquay hasseling women.

[One percent]

7 minutes ago, Onsamui said:

Yes they did.  The AS's used to stand outside Birties in Newquay hasseling women.

And we are expected to just accept that sexist, misogynistic behaviour and keep smiling, never criticising. 

[apples]

On 28/05/2024 at 17:08, One percent said:

If two or more apartments were purchased any prospective purchaser would likely be entitled to The 'multiple dwelling relief' and a saving on the Stamp Duty payable.

I didn't know what that was, so I looked it up. Better buy those flats quickly:

https://www.gov.uk/government/publications/stamp-duty-land-tax-abolition-of-multiple-dwellings-relief-from-1-june-2024

Quote

This tax information and impact note explains that Multiple Dwellings Relief (MDR) will be abolished with effect from 1 June 2024. MDR is a bulk purchase relief from Stamp Duty Land Tax which applies to the purchase of 2 or more dwellings.

[Frank Hovis]

A few have sold (or possibly been delisted) of each catgeory over this last week (14 houses, 3 flats), the percentage of flats for sale continues to increase and is up by 5% (53% from 48%) in the last 8 days.

In the over £500k category the percentage has dropped but this is the law of small numbers - just one flat has gone and this included in the three total flat sales.

 

Flats for sale 119 (was 122, was 116).

Of which over £500k: 14 (was 15, was 15).

 

Compares to (showing just how many flats have been built):

Houses for sale: 226 (was 240,  was 231).  Flats listings 53% (was 51%, was 48%) of houses.

Houses over £500k:  55 (was 57,  was 54).  Flats listings 25% (was 26%, was 28%) of houses, both over £500k.

[Virgil Caine]

2 hours ago, Frank Hovis said:

A few have sold (or possibly been delisted) of each catgeory over this last week (14 houses, 3 flats), the percentage of flats for sale continues to increase and is up by 5% (53% from 48%) in the last 8 days.

In the over £500k category the percentage has dropped but this is the law of small numbers - just one flat has gone and this included in the three total flat sales.

 

Flats for sale 119 (was 122, was 116).

Of which over £500k: 14 (was 15, was 15).

 

Compares to (showing just how many flats have been built):

Houses for sale: 226 (was 240,  was 231).  Flats listings 53% (was 51%, was 48%) of houses.

Houses over £500k:  55 (was 57,  was 54).  Flats listings 25% (was 26%, was 28%) of houses, both over £500k.

Having lived on the coast since the early 1990s I think resorts are one of the places where property very easily gets speculated to excessive valuations in booms and then tends to implode during crashes. One of the main reasons being that these are often low wage economies so the market is basically dependent on sucking money in from outside. If that source of cash dries up then the prices simply can’t be sustained on local demand.

Edited May 30 by Virgil Caine

[Frank Hovis]

Just now, Virgil Caine said:

Having lived on the coast since the early 1990s I think resorts are one of the places where property gets speculated excessive valuations in booms and then tends to implode during crashes. One of the main reasons being that these are often low wage economies so the market is basically dependent on sucking money in from outside. If that source of cash dries up then the prices simply can’t be sustained on local demand.

 

Yes.

There is also the lead time for a new development.

When developersl were buying these older hotels and putting in for planning permission to convert them to flats it would have been at a time (lockdown) where almost anything coastal was selling.

Scroll forward to 2024 and there an absolute load of flats on the markets and many more to come, nobody is prepared to pay top dollar anymore and they just aren't shifting.

The massive Hayle development going bust was a sea change IMHO, the developers are going to be tumbling like ninepins now that interest rates have gone up affceting both buyers and their own debts.

 

[Virgil Caine]

To be honest I can’t see either asylum seekers or students coming to the rescue. Economic migrants will inevitably be drawn to big cities sooner or later while the HE sector is on the financial skids with its own property bubble problems. 

[Frank Hovis]

32 minutes ago, Virgil Caine said:

To be honest I can’t see either asylum seekers or students coming to the rescue. Economic migrants will inevitably be drawn to big cities sooner or later while the HE sector is on the financial skids with its own property bubble problems. 

 

Yes.

If it was Plymouth or Exeter then they could be switched to rentals for asylum seekers as these are reasonably big cities.

Arguably add in Falmouth if you are looking at student rentals but I have read of student accommodation blocks running into financial trouble in Plymouth for one.

I don't see any use for these that will give the devlopers sufficient return to avoid their going bust.

It is going to be an interesting summer.

[With a crooked smile]

On 22/05/2024 at 10:01, Frank Hovis said:

There are also vast numbers of flats due to come to market from hotels being converted.  From my travels I would say that Newquay has the most number of these being built with Falmouth quite a way back in second place so the figures are for Newquay.

Here they just become Airbnb's and it seems the market can take it.

I only started airbnbing a small annexed part of the house this year (not a proper flat) so I'd expect Februarys figures to be better next year. A proper flat should significantly out preform this.

Indo think flats are always a risk in a recession tho.

[Frank Hovis]

21 minutes ago, With a crooked smile said:

Here they just become Airbnb's and it seems the market can take it.

I only started airbnbing a small annexed part of the house this year (not a proper flat) so I'd expect Februarys figures to be better next year. A proper flat should significantly out preform this.

Indo think flats are always a risk in a recession tho.

 

Massive oversupply, far too many peopel thinking they can make money doing it.

You only read anecdotals but according to them 2023 was bad, 2024 worse.

[One percent]

8 minutes ago, Frank Hovis said:

 

Massive oversupply, far too many peopel thinking they can make money doing it.

You only read anecdotals but according to them 2023 was bad, 2024 worse.

I concur. It’s busy here this week, despite the weather but it’s half term.  The last two seasons, it has been very quiet outside of the traditional peak season.  There’s 38 percent of residential property not being used for residential use.  It’s a time bomb.  

[swiss_democracy_for_all]

10 hours ago, One percent said:

I concur. It’s busy here this week, despite the weather but it’s half term.  The last two seasons, it has been very quiet outside of the traditional peak season.  There’s 38 percent of residential property not being used for residential use.  It’s a time bomb.  

Are you sure? The prices are so high for Airbnb now, I reckon many can stay afloat on minimal occupancy. Time bomb won't go off unless they start competing for business with significant price cuts.

[One percent]

12 minutes ago, swiss_democracy_for_all said:

Are you sure? The prices are so high for Airbnb now, I reckon many can stay afloat on minimal occupancy. Time bomb won't go off unless they start competing for business with significant price cuts.

Dunno.  It depends how highly leveraged and greedy they are. There are a lot running for the exit. 

[Wight Flight]

36 minutes ago, swiss_democracy_for_all said:

Are you sure? The prices are so high for Airbnb now, I reckon many can stay afloat on minimal occupancy. Time bomb won't go off unless they start competing for business with significant price cuts.

Don't they need something like 24 weeks occupancy to get the tax breaks though?

[swiss_democracy_for_all]

2 minutes ago, Wight Flight said:

Don't they need something like 24 weeks occupancy to get the tax breaks though?

I'd guess if they were 2 or 3 weeks short, or possibly even for more, that could be faked fairly easily.