A fresh boom in holiday let investors and second home owners has created a big issue for Whitby

Whitby is the jewel in the Yorkshire coast’s crown but its popularity has left first-time buyers struggling

If, in the 1970s, it was announced that Whitby would become one of the most fashionable coastal resorts in Britain, there would have been much hilarity at such an unlikely prospect.

Back then the derogatory saying “What’s up with you? It’s better than a wet weekend in Whitby” was still common parlance – but how things have changed.

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The town and its surounding villages now attract legions of tourists from across Britain and beyond to rightly celebrate its historic abbey, its quaint cottages, period terraces, its beach and truly exceptional sea views.

Beautiful Whitby is a hotspot for visitors, investors and second home owners

But its popularity has come at a price. The property market has been booming for some time, fuelled by incomers from other parts of Yorkshire and far beyond and also by investors who have turned homes into holiday lets.

The pandemic then put a rocket under the market by effectively increasing the number of people who could make Whitby their main home. Consequently, prices have rocketed and first-time buyers are struggling to get on the property ladder while those who need to upsize are also finding it difficult, particularly as salaries in the area are lower than average.

Scarborough Council, which covers Whitby, has announced a feasibility study into curbing the number of second homes and holiday lets and placing covenants on new-build homes so they can only be sold to owner occupiers or landlords for use as primary residences. Councillors were particularly concerned about the impact of seasonal occupation as in low season a quarter of properties in the town are not inhabited year-round.

Here, estate agent and chartered surveyor James Smith, of Whitby-based Richardson and Smith uses his in-depth knowledge of the market to give us a true insight into the situation while suggesting solutions:

First time buyers are now struggling to get on the property ladder in Whitby

“Although 2021 was very difficult for us all due to the stresses and strains caused by the pandemic, it turned out to be a bumper year for residential property prices. Year-on-year increases were reported to be around 10 per cent nationally, but for Whitby and district this was felt to be over 20 per cent and even then there were some sectors that were busier than others. Popular sectors included holiday cottages of all shapes and sizes and lifestyle properties, such as smallholdings or houses with annexes.

“The renewed interest in UK holidays fuelled the existing demand for holiday cottages to new heights and the long-term option of working from home raised demand in areas that were conventionally outside of accepted commuting distances,” Mr Smith said. “Alongside this was a general requirement for greater access to the countryside and homes with bigger gardens. All of these factors combined to provide huge demand for property in Whitby and the adjoining National Park.

“The imbalance was exacerbated by a shortage of property available and 2022 appears to be starting where 2021 left off.” Mr Smith added: “The bullish market could be good for prospective buyers prepared to take the risk and sell early in the year, with the prospect of rising interest rates, a cost of living squeeze and political economic difficulties on the horizon. There is a downside to this growth and it lies with first-time buyers being priced out of the market – a real problem for the sustainability of local communities. This is not new in the National Park where new builds have been limited to local occupancy only, until very recently and even now the requirement is for owners to be permanent residents.

“But now the problem is being keenly felt in the town too. This has caused Scarborough Borough Council to announce that it is looking into ways in which it could secure houses for locals, but it is difficult to see how it can be achieved. It will almost certainly only apply to new homes through planning restrictions, but most of the projected sites already have permission.”

Whitby's harbour is just one of the town's many attractions

Mr Smith continued: “Recent reports have suggested that about 25 per cent of homes in Whitby are holiday lets but to keep a viable community there needs to be balance and homes for locals. We cannot penalise tourism because it has become our major industry, but perhaps exception sites for affordable local housing is the answer, on land that couldn’t otherwise get development.

“The last couple of years have seen huge increases in residential rents too. A shortage of supply and a strong demand from locals and outsiders have caused prices to spike. The raft of recent changes for landlords will only put-off them off buy-to-let and see supply further restricted while driving up rents.

“While the increasing standards and security of tenure will be welcome, if people can’t afford the properties that are left, will the social housing sector be able to fill the gap?”

*James Smith is an estate agent and chartered surveyor at www.richardsonandsmith.co.uk

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