Around the middle of May I started to get enquiries from people looking to buy a second home in Sandbanks. Normally I deal with 4 or 5 enquiries a month and this had petered out during lockdown so I was happy to see further evidence of a return to some sort of normal. As we progressed through June the trickle turned into a steady stream which saw me speaking to 3 or 4 people a week, then once confirmation came that we would be reopening on 4th July things went a bit bonkers and I started getting enquiries almost daily.
As always each person’s motivation is different but there are a number of themes emerging around a very attractive combination of security, yield and enjoyment and anticipation of a new normal in our working lives.
Flexible Working & Home Working
Most organisations have been forced to conduct an experiment running a remote distributed workforce. Many thought it would be impossible to maintain productivity but have found the opposite. Who would have thought that highly motivated people willing to endure miserable commutes of 90 minutes or more each way into the city would do a better job if you gave them those three hours back and removed the distractions of the office?! With hindsight it seems obvious and although there are downsides and it’s not for everyone it’s clear there is going to be a permanent change to working practices.
This is a game changer for the UK second home market in general and Sandbanks in particular with many of those high net worth professionals based to the South or West of London just a short drive away. Fridays and Mondays at home may well become the new normal and working from a home by the beach is a very attractive proposition.
The Numbers Add Up
High end holiday homes have always delivered a modest yield and we have tended to work with owners whose primary motivation is not squeezing out the maximum return. The most common path for a property to join us up until now is after being used purely as a second home for a few years so an expense rather than something generating income. For years when discussing income I’ve said if you’re only interested in yield then get a student let or a commercial property. Those categories are looking pretty shaky at the moment, income from deposits or gilts is practically zero and it’s a brave person who would put all of their money into equities.
A nice house in Sandbanks looks like a safe place to park your money and the unique tax treatment of qualifying furnished holiday lets mean income can be tax free for many years.
A Change Of Mindset
A friend of mine has a son who’s a salesman in a high end car showroom. I commiserated with him at a summer BBQ- who is buying a car at the moment, let alone a flash one? Turns out I couldn’t have been more wrong, they had bumper months in June and July. I hear that a local jet ski company committed to a large order of stock just before lockdown and thought they were staring down a barrel but sold out within a few months.
Some of this is down to people having more leisure time but what I’m getting a sense of is a change of mindset- what’s the point in having money in the bank and working flat out just to get more? Many people have reevaluated their priorities during lockdown and will live a more balanced life in future. For some a second home will be the centerpiece of the new normal and in the long term is likely be a sound investment too.