With a surge in demand for staycations as people continue to shun overseas travel in favour of domestic holidays, could there be an opening for more niche forms of property investment such as beach huts?
Despite being small in size and stature, beach huts can go for a pretty penny and have become increasingly trendy in recent years as historic British seaside resorts have experienced something of a renaissance. Many have reinvented themselves as creative and artistic hotbeds – eager to do away with some of the tackier elements typically associated with British beach locations.
According to the latest research from lettings management platform Howsy, the cost of renting a beach hut in the most sought-after coastal locations will set you back more than the average cost of renting in Westminster. Meanwhile, research from GetAgent.co.uk has shown that the average cost of purchasing a beach hut in Dorset is more than the average house price in Burnley.
How much does a beach hut typically rent for?
Howsy analysed the cost of renting a beach hut across five of the most desirable locations on the South Coast. The research reveals that, on average, these pint-sized properties will set you back £1,525 a month.
With Covid-19 leading to a staycation boom, it perhaps comes as no surprise that this is 2.6% more expensive than last year. In the broader context of the national rental market, this cost would sit between Ealing and Brent – affluent London boroughs – where monthly rental prices are concerned.
The most expensive beach hut rental hotspot, according to the research, is Mudeford in Dorset. While the cost of renting a beach hut there has increased by the lowest annual amount compared to other locations, at only 1.2%, it will still set you back an eye-watering average of £3,860 a month, more expensive than the average monthly rent in Westminster, Kensington and Chelsea and Camden.
Picturesque Whitstable in Kent is also home to an average beach hut rental cost of more than £1,000 a month (£1,232), having grown by 4.1% over the last year. In the regular rental market, it would sit between Runnymede and Woking in terms of monthly rental cost.
However, in Sandbanks – the most expensive location in the regular coastal market, and home to famous faces such as Harry Redknapp and his wife Sandra – the cost of renting a beach hut in the Dorset hotspot is only the third most expensive at £948 per month (albeit up by 3% year-on-year).
That’s despite Sandbanks – the exclusive peninsula sandwiched in between Poole and Bournemouth, and opposite Brownsea Island – having the fourth highest land value of anywhere in the world.
While Southwold in Suffolk (£832) and Bournemouth (£752) rank as the least expensive in terms of monthly rental costs, they have seen the most significant annual increase in rental prices at 5.6% and 4.4% respectively.
What does it cost to buy a beach hut?
Research by estate agent comparison site, GetAgent.co.uk, revealed that when it comes to buying, beach huts are predictably more affordable than the regular property market.
Depending on where you buy, though, they can still set you back more than the average house price in some parts of the UK.
Based on current beach hut ‘for sale’ stock, the average beach hut will set you back £36,688. Dorset, home to seaside hotspots such as Poole, Bournemouth, Lyme Regis, Weymouth, Boscombe and Christchurch, was unsurprisingly the most expensive location, with an average price of £92,136. That’s more than the average cost of buying a home in Burnley. One beach hut in Swanage, Dorset, is even currently listed for sale with an asking price of £300,000.
The second most expensive spot to buy a beach hut is East Sussex, where the average price is a far more affordable £29,563, followed by Essex (£18,568), Hampshire (£25,000), the Isle of Wight (£17,500), Kent (£22,500) and Suffolk (£13,500).
The best beach hut bargain buy is currently offered in West Sussex, where the average price stands at just £10,500.
Calum Brannan, founder and chief executive of Howsy, commented: “It would seem as though beach huts offer the solution to a buy-to-let sector that has been battered by a string of government changes to tax relief and stamp duty.”
“While the cost of acquiring a beach hut is generally far lower than the regular market, the astronomical rents secured on them will be resulting in some very favourable yields indeed.”
He added: “Of course, seasonal factors mostly limit the rental income available, but they do make a very hands-off investment indeed and could provide the perfect toe-dip into the buy-to-let sea for a first-time investor.”
You can see the full data on beach hut rentals and purchases here. To discover more about the fascinating history of beach huts, which are closely bound to the history of the seaside resort, going back more than 250 years, read this article by Dr Kathryn Ferry.
<!– –> This post has originally been featured in Property Investor Today.