Cornish housing crisis is driving multigenerational buyers
Defined by its natural beauty and rustic charm, the Cornish coast has long been a favoured destination for wealthier home buyers. However, local affordability challenges and shifting investments have led to a turbulent market – one in which house prices range from £120,000 to a whopping £2 million.
“There’s a definite shortage of housing,” explained Tom Crapp (pictured), director of Cornwall Mortgages. Housing affordability is a pressing issue, with prices reaching nine to 10 times the average salary. While some lenders have recently stretched their limits to offer loans up to six times income, Crapp noted that most borrowers are restricted to four-and-a-half or five times their income, creating significant barriers.
“It really restricts my clients in the first instance,” he added, pointing to the need for more hands on solutions.
‘As the children get older, there’s space for them to evolve’
Cornwall Mortgages has increasingly facilitated creative approaches to homeownership. Crapp pointed to the rising prevalence of multi-generational purchases, where families pool resources to buy larger homes with annexes to accommodate grandparents, parents, and children.
“As the children get older, there’s space for them to evolve,” he added. “We utilize schemes as much as we can, like joint borrower sole proprietor arrangements.”
Others allow parents who have fully paid off their homes, or built substantial equity, to leverage their financial position for their children. And it’s an increasingly popular solution in a market where conventional options often fall short.
Energy efficiency is becoming another critical factor influencing property decisions in Cornwall. The emphasis on greener living is reflected in large-scale projects like a 1,500-home development near Crapp’s office. Built on former China clay mining land, the development aims to balance affordability with sustainability by integrating renewable energy solutions to reduce ongoing living costs.
“They’re trying to keep your other costs down with renewable energy, despite the mortgage cost,” Crapp explained, noting the appeal of such features in a market where energy bills weigh heavily on household budgets. The rising availability in green mortgages, which can offer financial incentives such as rate reductions or cashbacks for energy-efficient homes, further highlights this trend.
‘Rental demand is really high’
But it’s not just the mortgage market that’s upended, the rental market in Cornwall has also undergone significant changes - particularly since the COVID-19 pandemic.
“Rental demand is really high,” Crapp told Mortgage Introducer, attributing much of this to the rise of remote work during lockdowns. With many professionals able to work from anywhere, Cornwall became a highly desirable location, offering a combination of natural beauty and improved work-life balance.
“Rents went up around 18%, well above the usual annual increases,” Crapp explained, pointing to the strain on both renters and the market as a whole. “You’ve got people that just wanted to be here because it’s Cornwall. Interest rates and taxation changes have made it difficult for private landlords to make investments worthwhile.”
Cornwall’s reputation as a hotspot for second homes and holiday lets adds another layer of complexity to the property market.
“About 5% of houses in Cornwall are second homes, but in some seaside locations, it could be as much as 40%,” Crapp said. While these properties generate significant tourism revenue and bolster the local economy, they also contribute to housing shortages for permanent residents.
Recent policy changes, including stricter council tax rules and reduced mortgage interest relief for landlords, have begun to shift the landscape.
“I have noticed more properties going back on to the market that were evidently second homes or holiday lets,” Crapp added. Despite this, he believes demand will remain strong due to Cornwall’s enduring appeal as a vacation destination.
“It’s good for the local economy, because, without second homes and holiday homes, the tourist trade would suffer,” he told Mortgage Introducer, recognizing the fine balance between economic benefits and community needs.
‘Historically, it’s always been a location’
Post-pandemic, the property market is seeing further adjustments as some individuals relocate again due to shifting work requirements.
“There are people being required back in the office,” Crapp said.
Nevertheless, he emphasizes that Cornwall’s unique allure ensures a continued interest from buyers and investors. “Historically, it’s always been a location for those types of people,” he stated.
Cornwall Mortgages has positioned itself as an ally in understanding the Cornish market, offering tailored financing solutions and a deep understanding of local challenges. Crapp remains optimistic about the region’s prospects, emphasising the importance of balancing creativity with practicality.
“It’s about finding the right balance—helping people access the housing they need while ensuring property investment make sense,” he concluded.
