_Waterfront View 2017: Demand for properties with water views buoyant

The UK is home to a variety of waterfront locations that appeals to a diverse collection of buyers, but waterfront living often comes with a premium. Whether it is a country house by the river, a one-bedroom flat by the sea or a cottage by a loch, a clear premium is paid by buyers for homes in close proximity to water.

“For a number of purchasers it’s the ultimate lifestyle choice,” Christopher Bailey, Head of National Waterfront at Knight Frank, says. “Waterfront property is very niche and very desirable, often in a market of its own and that helps to underpin values.”

Indeed, according to the latest Knight Frank Prime Waterfront Index, compiled by valuations from Knight Frank’s experts across the country, prices for prime waterfront properties are as much as 81% higher than comparable inland properties.

The index measures the potential value uplift for prime homes on the water’s edge, or within close proximity to water, compared with similar properties located further inland.

Not all prime waterfront properties are equal, of course, and a closer look at the data reveals that the premium varies by location.

The South West offers the most added value at up to 105%.

Christopher notes that the region is home to some of the country’s most expensive waterfront properties, with Sandbanks, Rock, St Mawes and Salcombe some of the hotspots.

“The most significant proportion of West Country buyers are looking to move out of London and the Home Counties bordering the M25,” Christopher adds.

“Interestingly, there is also significant interest in luxury waterfront properties from the Midlands, stretching down to the Bristol area. Many of our clients who are selling their homes, particularly in the South Hams, live in the Midlands and come down for the weekends and holidays driving down the M6 and M5 motorways.”

In East Anglia the very best waterside homes can command premiums of up to 51%, dropping slightly to 48% in the South East and 43% in Scotland.

Such impressive figures are underpinned by the fact that the most desirable coastal towns and cities across the UK appeal to a broad range of buyers.

“The diverse nature of waterfront property across the UK attracts a real melting pot of buyers from all walks and at all stages of life, whether they be upsizers, downsizers or simply those looking for a lifestyle change.” Christopher says. “International buyers also form a small, but important, part of the market.”

And the appeal really is global. Our web-search data shows that individuals from all over the world searched for prime waterfront property in the UK last year, led by potential buyers in the US, Germany, France and Spain.

A weaker pound following the EU Referendum has also benefitted non-sterling denominated purchasers, with Knight Frank figures showing a notable increase in the volume of expats buying waterfront property in 2016/17 compared with the previous year.

“In most cases the view is more important to buyers than the property itself,” Christopher adds.

“You can alter the property, but you can’t alter the outlook. The most important aspect to understand from a buyer’s perspective is the lifestyle they are looking for and how that can be matched to the property they will buy.”

Outlook

The introduction of a higher rate of Stamp Duty for 'additional properties', including second homes, from 1 April 2016, has had an impact on a market where historically there has been a notable level of discretionary purchases.

“We are now over a year away from those changes and the market has broadly absorbed these additional costs,” Christopher says.

“However, the net result is that we are generally not seeing sales prices increasing. These changes to SDLT on second homes seem to be keeping a lid on any upward price movements in the near term.”