'True waterfront homes are finite... miss one and it could be years before you see another like it again': Why the best waterfront property always hits the spot

Homes situated close to the water are renowned for capturing the imagination, whether they’re tucked along a river, overlooking a lake or perched on a cliff. Such is their charm that waterfront homes in the UK now command an average price premium of 51% compared with their inland equivalents — up from 48% last year, according to Knight Frank’s latest research.

‘True waterfront homes are finite. These are often one-off properties in exceptional positions and there simply aren’t many of them,’ explains Hamish Humfrey, Knight Frank’s head of national waterfront. ‘Owners tend to hold onto them for a long time, so if you miss one, it could be years before a similar opportunity comes up again.’

Nearly half (48%) of waterfront buyers purchased with cash in the year to March, helping to buoy the sector. This compares with 39% in the overall premium housing market.

Estuary locations command the highest premium of all, with an average uplift of 74%. This has edged down from 75% last year. ‘What makes estuary living so special is the ever-changing scenery, from shifting tides to the evolving landscapes with each season,’ says Louise Glanville, head of the Knight Frank office in Exeter. ‘The dynamic nature of the estuary creates a unique lifestyle, offering a wide range of activities and watersports.’

Homes next to lakes and lochs follow, with an average premium of 71%, unchanged from last year. ‘Lakeside living offers a rare blend of natural beauty, tranquillity and luxury, particularly within curated private estates such as The Lakes by Yoo [in the Cotswolds], which has become a real hotspot in recent years,’ explains Craig Fuller of Craig Fuller Property.

Coastal properties are typically worth 66% more than equivalent non-waterfront homes, with the premium also remaining the same as last year. Jamie Freeman, director of buying agency Haringtons UK, notes that, despite a downturn in discretionary buying, ‘the very best-in-class homes — trophy properties with sea views, private beach access or architectural merit — still command strong interest’.

Some of the most sought-after coastal markets include Mawgan Porth, Polzeath, Rock, Trebetherick and St Mawes in Cornwall, as well as Salcombe and Dartmouth in Devon, adds Mr Humfrey. Further up the coast, he cites Sandbanks in Dorset; Lymington and Beaulieu in Hampshire; and Chichester Harbour, West Sussex; plus parts of north Norfolk and the Suffolk coast.

Harbour and inland river locations enjoy premiums of 43% and 24% respectively; up on last year. According to Ed Sainter of Middleton Advisors, riverside homes are rare — especially those with private moorings — and often remain in families for generations. ‘That scarcity makes them even more sought after when they do come to market,’ he says.

In London, homes close to the water have only a 14% average price uplift. Key attractions of Thameside properties include connectivity (river services) and views. However, Marc Schneiderman, director at Arlington Residential, says premiums on Blomfield Road and Maida Avenue, overlooking Regent’s Canal, are upwards of 20% compared with neighbouring roads. ‘They have become some of the most sought-after homes in west London, competing with the period villas of Notting Hill.’

Against a backdrop of economic and political uncertainty, the number of waterfront homes on the market outside London increased by 6.4% in the year to March. Although that figure was flat across the country as a whole, the number of offers made (across the UK) was down by one-fifth. This led to average UK waterfront prices dipping by 1.2%, finds Knight Frank. Higher stamp-duty costs and market volatility haven’t deterred people from wanting to buy, observes Mr Humfrey, but they are being factored into what buyers are prepared to pay. ‘That’s likely part of the reason we’ve seen prices soften slightly,’ he adds.

At the high end of the market, waterfront sales above £3 million accounted for 9% of all homes sold near water in the year to March, down from 12% in the previous 12 months. However, Christian Swaab, head of Strutt & Parker’s national waterside team, believes that ‘confidence is returning, particularly at the £3.5 million-plus end of the market, where buyers are often less exposed to wider financial pressures and more focused on finding the right long-term home’.

It’s the middle of the market that’s feeling the pinch, explains George Nares, co-founder of Blue Book Agency. ‘The 3% stamp-duty surcharge on additional homes, coupled with rising council-tax premiums in many holiday destinations, has made ownership far more expensive. For buyers considering a second property rather than a primary home, these added costs are increasingly hard to justify.’