House prices are soaring in North Cumbria due to unprecedented demand, a leading estate agent says, with 80 per cent of his buyers coming from outside of the county.
Nick Elgey, of Hackney & Leigh, said bidding wars for property and sales being agreed swiftly were now the norm, largely caused by buyers being driven to invest their money in a ‘safe haven’ due to the uncertainties caused by the COVID-19 pandemic.
He said: “Once we advertise a desirable Lake District house, we normally receive enquiries from all over the UK.
“This frequently leads to contested bidding and has caused house prices to rise sharply. I have specialised in estate agency throughout Cumbria for more than 30 years but I have never seen such intense levels of activity.”
He said there was exceptionally high demand for properties in the South Lakes ‘honey pot’ locations including Windermere, Ambleside, Bowness and Newby Bridge, and although this is not untypical, it is now also evident in Keswick and the outlying villages such as Threlkeld and Braithwaite and in areas closer to Penrith, including Pooley Bridge and Glenridding.
“Essentially, the highest demand covers locations set in Lake District scenery within the national park,” said Mr Elgey.
Rightmove has reported that sold prices within a five-mile radius of Keswick rose 25 per cent in 2020 compared to 2018.
“A modernised Victorian four bedroomed terrace house in Keswick will sell for over £400,000 now, whereas 18 months ago such house sales would be around the £300,000 figure,” he said.
Other evidence he cited included a house at Braithwaite bought two years ago for £550,000, which was sold by his Keswick office as a second home for £650,000.
Mr Elgey added: “Another house in the same village was bought by a family moving to the area from the South for a better quality of life.
“This house sold for £720,000 just two years after the sellers paid £560,000, although they had extended the kitchen.”
Rival bidding drove up the price of a bungalow at Pooley Bridge to £635,000, which was £40,000 over the asking price.
“There was staggering interest from national buyers including one from Jersey. We could have sold the bungalow 10 times over,” said Mr Elgey.
“In February this year we advertised a house near Buttermere at offers over £925,000 and in less than a fortnight it was bid up to £975,000 with a sale agreed for the buyer’s use as a second home.”
Mr Elgey said there were various reasons for the substantially increased demand.
He added: “A main factor is buyers wishing to invest their money in what they consider to be a safe haven.
“They are seeking Lake District houses for recreational use as a second home or to earn rental income from holiday letting, especially following the staycation boom due to the pandemic and the record low bank base rate which is stagnating cash investments.
“Some of these buyers are experienced property investors who are now sceptical about buying commercial shop or office premises due to the economic uncertainties, online retailing growth and increased home-based working.
“Others are using inheritance money, pension funds or are able to arrange mortgage finance.
“The North Lakes area has become more attractive for some buyers because prices are still marginally lower compared to those in the South Lakes and, as holiday rental levels and occupancy rates are similar, there can be a higher investment yield in the North Lakes.”
Mr Elgey said the Stamp Duty holiday, which has just been extended to the end of September, has also helped the surge.
He said there was a rise in enquiries began last June when the lockdown restrictions were lifted for estate agents.
A pent-up demand was released from prospective buyers who had been browsing properties online during the preceding two months of lockdown.
He added that the true extent of house price rises had not unfolded yet as the latest published Land Registry sales data covered transactions legally completing up to November from sales which were previously agreed during summer when prices suddenly started to rise and, in some cases, continued to do so into autumn.
He said: “While house price increases were welcomed by most sellers, they are causing some local buyers to be out priced by national buyers and finding their communities are becoming more tourism-oriented.”