At the end of 2009 house owners in the South west were given something to smile about with house prices rising on the year before for the first time since the recession began.  Nationally Halifax latest house price index has shown property values are continually increasing in value.  Whilst this is a long way short from the height of the market several years ago it is providing a buoyant mood for controlled growth during 2010.  Local estate agents are reporting a busy time as a result of higher demand and a relatively low level of properties available on the market.

Other factors are affecting the market in the South West.  Air travel has contributed to Cornwall’s growth making the area affordable and quick to travel to; this gateway into the area has given the economy a significant boost.  A drive to Cornwall can take up to six hours from London, by plane it is merely one hour.  However recent changes in expansion in these areas could stunt the growth of the regional economy.  The Committee on Climate Change UK has stated the industry needs to limit its growth and present plans for regional airport growth in the area could be thwarted.

The recent controversial Government plans to scrap tax help for owners of furnished holiday flats and houses will have a significant effect in Cornwall.  On the one hand this influx of holiday makers gives an injection of cash into the region; it does often make areas with high numbers of holiday homes uninhabitable in the off season.  Local shops and post offices have closed as they are not sustainable all year round.

The change in taxation will leave many of these second homes less affordable which will see a flood of houses coming onto the market.  Presently it is estimated that it will affect 60,000 properties in the region.  Historically house prices in the area have been pushed up by second home owners, leaving local residents unable to enter the home ownership market.  This tax change could help to moderate this and close the gap in cost and affordability for locals by dampening house price rises.

Nationally 2010 will be a testing year for the economy and this will affect house prices.  Whilst confidence is increasing there are a number of factors already discussed which will continue to dampen any dramatic rises.  The cost of paying off the national debt and the anticipation of the general election will restrict house buying activity leaving house prices rises in the South West flat during the coming year.

Anna Barrington writes for Percy Williams & Sons. For more information about their properties please visit new homes Cornwall.

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