0:01 AM, 9th April 2025, About 3 months ago
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As the appetite for seaside homes in the UK continues to rise, investors are increasingly balancing lucrative returns against rising climate threats, one firm says.
Insurance firm Pikl says that with increasing property prices and affordability concerns, pinpointing areas that offer both profitability and durability has become essential.
To help investors, it has delved into public property data to unveil the UK’s leading 10 coastal investment areas.
Its evaluation weighs critical elements like Price-to-Income (PTI) ratios and flood hazards, providing a guide for investors seeking optimal opportunities while addressing potential environmental concerns.
The firm’s holiday let insurance expert, Cliff Ward, said: “Over recent years, PTI ratios have climbed significantly, with property prices remaining high while rental yields, though rising, have not necessarily kept pace.
“This shift means that property investors must take a long-term view.
“Where once a five-year investment cycle could yield a return, today’s buyers may need to commit to at least 15 years before seeing a full return, assuming minimal gaps between tenants or a consistent holiday-let occupancy rate of around 60%.”
He added: “For those eyeing coastal investments, flood risk is an increasingly critical factor.
“The long-term viability of a property must be considered alongside its initial appeal.”
South Shields promises the swiftest investment recovery among UK coastal spots, bolstered by a robust rental market and minimal flood threat, positioning it as a prime pick for those targeting sustained gains in either private rentals or holiday lets.
Though property values are steeper, Falmouth’s substantial rental income enables quicker returns compared to many other UK coastal regions, though its moderate flood risk warrants attention when evaluating properties.
Morecambe stands out for its reasonable property costs and reliable rental income, yet its significant flood risk could affect future stability and insurance expenses, requiring careful site selection.
The Gower Peninsula combines low flood exposure with high annual income, making it an enticing coastal spot that offers both value and profitability.
Dunbar presents a dependable investment option with steady rental returns, appealing despite its marginally higher PTI. Opting for holiday lets here could shave up to 4.4 years off the profit timeline.
Bognor Regis’s elevated flood risk is a crucial consideration, but its strong rental yields still attract investors prepared to tackle climate challenges.
Blackpool’s affordability draws new investors, though its extended return period makes it ideal for those with a prolonged investment horizon.
Scarborough’s steady rental demand and moderate flood risk make it an attractive coastal choice for those seeking a mix of cost-effectiveness and earnings.
Aberystwyth offers reliable returns, but its slightly longer PTI indicates it suits investors with a patient approach.
Largs, the most budget-friendly entry into coastal property ownership, has a prolonged PTI but remains a sound choice thanks to solid demand, moderate flood exposure, and low costs.
