It’s been called a perfect storm, an extraordinary set of circumstances which have stoked Cornwall’s housing market to the point that people are, quite literally, taking to the streets.
Historically there has long been a mismatch between house prices in Cornwall and average wages, and that affordability gap is growing.
In June the average price of a home in Cornwall was £275,677, which is a 17.7% increase on the year before, outstripping the 13.3% rise nationally. Prices are still below the English average of £284,029, but so are wages. In 2020 average earnings in Cornwall were just 77% of the UK average, at £19,847. That’s a price-to-earnings ratio of 14 to 1.
Little wonder then that Truro has just earned the dubious accolade as the third most unaffordable city in Britain, behind Winchester and Oxford, and tied joint third with Bath.
Many of the hotspots for recent house price increases have been rural areas fuelled – if you believe the headlines – by an influx of wealthy outsiders escaping the cities during the pandemic. Rightmove said earlier this year that Cornwall was its most searched for location, and one up-market agent says 44% of their buyers this year have come from outside Cornwall.
Enforced homeworking has led many people to rethink their lives as they realise, they can actually work from anywhere, with local independent schools reporting a hike in applications as parents seek a better quality of life.
It’s easy to pin house price inflation on incomers but I think it’s actually more nuanced than that. A straw poll we conducted among local agents in the one to four bedroomed market up to £450,000 found that between 75% and 85% of recent sales in Cornwall have been to local people, not people from outside the County.
But there’s no doubt that demand is outstripping supply across the piece and no more so than Cornwall’s rental market. This has always been volatile because landlords can make a lot more money by renting properties out to holidaymakers during the lucrative summer months than from long-term tenants. The result is that some renters get thrown out of their homes as properties are ‘flipped’ for the summer market.
The problem has been exacerbated this year by the travel restrictions related to the pandemic, which has seen millions more people choose to holiday at home in places like Cornwall rather than go abroad. That in turn has led to a sharp decrease in numbers of rental homes as landlords cater for the staycation boom.
There’s also some evidence of landlords choosing to sell up while prices are high. But all this comes at a human cost. One tenant in Perranporth uprooted for the fourth time in as many years told Cornwall Live: “We never feel settled because it’s not a home. It’s like just camping out in a house. It’s strange never be able to relax in what should be your own home.”
There’s also an economic cost. A recent Business Impact Survey carried out by the Cornwall and Isles of Scilly Local Enterprise Partnership found that two-thirds of local businesses were having difficulty hiring staff because of Cornwall’s housing crisis, and almost a third were finding it hard to hold onto their staff.
When asked why this was, house prices and high rents were cited as among the top three reasons, but it was actually a lack of rental properties that was the top concern, with 83% of respondents.
Half of businesses said staff vacancies were going unfiled because people who had been offered jobs could not find anywhere to live, while almost a third said the housing situation meant they were having difficulty holding onto their staff. This is turn is holding back business growth and recovery from the pandemic.
The business I run, Treveth, was set up two years ago by Cornwall Council to address some of these issues, especially in the rented sector.
We’ve got more than 600 new homes in the pipeline across Cornwall in Tolgus, Bodmin, Liskeard, Newquay and Launceston. Around 50% of those will be for private rent to help address that specific need, with 30% – or almost 200 – built as affordable homes. The rest we will sell on the open market, to local people wherever possible.
Our mantra is ‘Profit with Purpose’, so any profit we make is returned to Cornwall Council. Along the way we want to disrupt Cornwall’s rental market for the better, driving up the quality of homes and driving down their running costs through the use of quality materials and low carbon technologies.
That’s why we’re offering three-year tenancies as standard, so if you rent a Treveth home you know your family won’t be moved out in the summer. And if you want to renew your tenancy after three years, you can.
People should not be made to feel like strangers in their own homes. They should have the security to put down roots and be part of the community.
We also favour local people. If you want to rent a Treveth home you must demonstrate a local link, either because you already live in the area, have a job, or family nearby. And the affordable homes we build are for people on the Council’s Homechoice register.
We can’t solve Cornwall’s housing crisis on our own, but we are determined to put local people first.
Tim Mulholland is managing director of Treveth, www.treveth.co.uk