From Costa to Criccieth…Brexit fuels demand for holiday homes in North Wales

Brexit and the falling value of the pound could fuel an increase in demand for second homes and retirement properties in North Wales.

Purchases by Britons on Costa del Sol and Costa Blanca have already slumped by about 50% since the EU referendum.

It is now predicted that the falling value of the pound – which dents the buying power of Brits – and the potential that buying abroad could become more difficult after Brexit will continue to damage sales in former ex-pat hotspots like Spain and France.

This is expected to spark an increase in the number of people looking to coastal and rural UK hotspots for holiday or retirement properties.

A report called ‘Holiday Homes Uncovered’ by home insurer Home Protect found an increase in demand for second homes in Gwynedd – thanks to Brexit and changes by the Treasury.

During the six months post Brexit, Home Protect saw a 40% increase in second home and building insurance enquiries in Gwynedd.

This could impact further on local buyers trying to get on the housing ladder by increasing competition for homes.

Anglesey and Gwynedd estate agent Elfyn Williams, from Williams and Goodwin, said the Brexit factor will make buying a second home in North Wales more attractive.

Mr Williams said: “Brexit could make a difference and increase demand.

“The reality is that the falling pound has to be a factor. If someone had £500,000 to spend then that now will get a lot less in say Spain than it would of before the Brexit vote.

“This makes second homes or investment in this country more attractive so we could see demand increase in North Wales.

“But there are so many factors, with confidence in the market the most important factor.”

Factors that could stem demand include proposed increases in council tax for second homes in counties like Anglesey, Gwynedd and Conwy.

The ‘Holiday Homes Uncovered’ report said: “Brexit brings a new year of economic volatility. In the case of holiday homes, the flight towards property played out as we expected.

“As the value of the pound and consumer confidence plummeted, more people poured their money into property.

“The rapid fall in the pound’s value no doubt made UK holiday homes more attractive to investors, but we suspect the biggest reason for our large spike comes more from the Treasury than the Brexiteers.

“Holiday homes became a more attractive investment than traditional buy-to-lets, as they were exempt to the changes in stamp duty announced in November 2015.

“However, it was the sweeping changes to pension law that allowed a glut of people just before the retirement age to flood into the market.

“We’ve seen that there has been an increase in the listings of holiday homes in Cornwall, Norfolk and Gwynedd – three popular locations for retirement age holiday home owners.

“With the pound weakening and more Britons choosing staycations in the UK rather than traveling abroad, holiday homes could also be one of the growth industries of the next few years.”