Prestige Homes

With a coastline that covers 7,700 miles as well as 1,500 miles of river, 30,000 Scottish lochs and a renowned Lake District, the UK should be awash with waterfront homes. Yet the figures tell a story that’s closer to a drought than a deluge with demand for the best properties easily outstripping supply.

The premium appeal of waterfront living

As the laws of supply and demand dictate, these properties carry with them a premium for prospective buyers. Research from Knight Frank shows that the premium for a waterfront property over a comparable one inland averaged 48 per cent in the second quarter of 2023. It’s a markup explained by the relative scarcity of supply and the enduring appeal of a waterfront home, says Hamish Humfrey, Knight Frank’s head of National Waterfront.

“Having direct access to the water, a gate onto the beach allowing you to grab your surfboard and go, or a mooring for your boat at the end of the garden, is considered a significant lifestyle plus,” says Humfrey. “The wish list for most high-end buyers is a property with views and direct access to the water, on an estuary, lake or the coast, encircled by enough land to ensure privacy. There’s also strong demand for waterfront plots from people eager to build their own home, but these are even harder to find.”

Remote working might also explain the high percentage of waterfront homes purchased as primary residences in the twelve months to April 2023, 94 per cent according to the Market Overview, with 81 per cent of buyers coming from London, the Southeast and the Southwest.

Location, Location, Location

“The very best waterfront homes, directly on the river or the sea, are often held in families for 30 to 40 years, frequently transacting only once in a generation,” says Jake Civardi from independent specialist buying agency The Buying Solution. “Buyers of these properties see the water as their happy place and are far more concerned with what the house looks out onto than how it looks inside. Yet the scarcity of these properties mean that buyers might only find two or three opportunities in a year and so despite building costs now being 40 per cent higher than pre-Covid, renovations might be necessary to secure the location they want.”

The most favoured waterfront location, according to Knight Frank’s Waterfront Index, is beside a lake or loch where the premium over comparable inland properties soars to 71 per cent. Coastal properties saw an average premium of 66 per cent with homes on an estuary registering 64 per cent. The specific geographical locations in high demand are, in general, the ones that have stood the test of time: Salcombe in Devon, St Mawes, Rock, Polzeath and Padstow in Cornwall and Lymington in Hampshire among them.

Civardi helps clients source properties in some of these popular areas, along the south coast from Devon through Dorset and Hampshire to West Sussex with prime areas including West Wittering, Chichester Harbour, Sandbanks and from Lymington to Beaulieu Estate. “The south coast is very hit and miss,” he points out. “I spend considerable time driving clients around to educate them about the A-grade areas that I believe will always hold their value and where the waterfront premium is fully justified.”

And it is not only primary residences that have seen increased interest since 2020. “With remote working here to stay, waterfront homes purchased as second homes are now being used for much more than just occasional weekends and a few weeks every summer,” says Humfrey. “This means that many buyers are willing to travel further, looking in slightly less well known areas such as Saunton, Croyde and Putsborough in Devon. On this northern coast, the lifestyle is based more around surfing rather than the sailing emphasis of the south coast and because supply of good properties here is limited, prices per square foot being achieved are starting to match those in locations such as St Mawes.”

Cash is king for buyers of the finest UK waterfront homes

Knight Frank’s Waterfront Market Overview also showed the dominance of cash buyers in the waterfront market, representing 54 per cent of purchasers compared with 29 per cent in the mainstream market. It’s a trend that Humfrey has seen grow over the past couple of years to the point where all purchasers of prime waterfront homes in his region over the past year were equity-rich.

“Last year I helped a cash buyer looking for a frontline waterfront home with great privacy but was open on the specific area,” says Humfrey. “He understood that it was a waiting game and after close to a year, he found a property with us in an ideal position on East Devon’s Jurassic Coast. He knew he had to act quickly before the property hit the open market because it would have attracted a great deal of interest. It’s clear that for so many of us, living by the water continues to captivate and provide an idyllic lifestyle.”

For more property market insight, luxury living trends and a showcase of the finest homes, visit Knight Frank.