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House price growth in tourist hotspots pricing out young and low paid

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Growing demand to live in tourist hotspots has pushed up prices to the point that young and low-paid workers in these areas are finding it unaffordable to purchase properties, a new Office for National Statistics (ONS) report has found.

It noted that house prices in some rural and coastal areas rocketed by three times the national rate in the year to July. For example, Conwy in North Wales has seen prices jump by 25 per cent over the past year, while North Devon prices have risen 22.5 per cent. House prices in Richmondshire in the Yorkshire Dales have grown by 21.4 per cent over the same period.

By contrast, the seven areas which have seen house prices fall were all found within London.

The ONS said that there was some evidence of people house-hunting in rural areas, ahead of cities, because of a change in their circumstances brought on by the pandemic, including the ability to work remotely. However, it added that there had already been a trend of people increasingly moving from urban to rural areas in recent years.

The report also highlighted that people who work in these tourist hotspots tend to earn less on average than the people who live there. It cited the example of the Cotswolds, where residents earn an average of 28.7 per cent more than those who are employed in the area. 

The ONS added that in tourist hotspots, workers tend to earn less than residents because of the types of jobs in these areas, which are often centred around hospitality. Not only do hospitality workers tend to earn less on average, but it is a sector that was hit particularly hard by the pandemic, with hospitality workers the most likely to be furloughed.

Locals can’t afford to stay

Sarah Coles, personal finance analyst at Hargreaves Lansdown, noted that this situation isn’t just difficult for families who can no longer afford to live in their hometown, but for the businesses whose employees are forced to leave town.

She added: “The ONS found this time last year that 29 per cent of people wanted to work from home at least part of the time in future, and 12 per cent of them considered relocating as a result. 

“We can’t be sure all this enthusiasm for homeworking has endured, as some people have become increasingly fed up after staring at the same four walls for another year, but there are still significant numbers ready for a change. It means buyers are flocking to the seaside and the countryside, and locals looking for a home of their own increasingly can’t afford to stay.”

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