Recently the Government made an announcement that wasn’t widely covered in the mainstream media – that more national parks and AONBs (Areas of Outstanding National Beauty) are to be created in 2021. In this post, we’ll look at the implications that this could have for property investors, developers, landlords and the property market overall.
The new national parks are part of the Prime Minister's 10 Point Plan to help kickstart the nation’s green recovery which also aims to create and retain more green jobs through the Green Recovery Challenge Fund. It is part of a wider initiative aimed at protecting 30% of UK land by 2030.
Firstly, let’s look at what national park designation means for the property market within one. Very importantly, property is invariably much more expensive within a national park (and even just near one) than elsewhere as a result. Research by the Nationwide Building Society suggests that property in a national park is 20% more expensive than comparable property outside it. Even property within 3 miles of one attracts a 6% price premium. It means that that a property worth for example £250,000 outside a national park could be worth £300,000 if it was within a national park.
There are currently 15 national parks in the UK. There are 46 AONBs, excluding Scotland which has a different system.
As to reasons why national parks are more expensive, this is partly because of demand. People want to live, and have second homes and holiday homes in attractive areas that are protected from development, which national parks and AONBs invariably are. There is also a supply issue. Planning permission to build and develop is generally much harder to get in a national park than elsewhere, with restrictions also applying in an AONB. National parks even have their own planning authority, rather than planning applications being decided by the local council as elsewhere.
One side effect is that areas within national parks and to a lesser extent AONBs often have fewer jobs as companies find it hard or even impossible to expand or locate there. Average wage levels in such areas are often low, and so property is unaffordable to many local residents.
So the creation of more national parks and AONBs could create some issues for developers, investors and others within them. It could suddenly be much more difficult to develop and build within the new areas. Places which currently have fairly balanced property supply and demand could quickly see higher demand, and more restricted supply. Prices within and even near the new parks and AONBs could rise way beyond those in the surrounding area.
Could there be any particular opportunities that the new national parks might offer?
- There could be property investment opportunities. For example, by buying before the new parks come into effect, then selling later, ie. flipping.
- There could be development opportunities. By developing now in the anticipation that prices will rise after the national park has come into effect.
- There could be planning opportunities. By obtaining planning consent for development before tighter planning rules come into force and perhaps selling on with consent in place.
- There could be more demand for rented property, and higher rents, as prices rise and fewer locals can afford to buy.
- There could be more demand for second homes and holiday lets in the new national park or AONB.
- Interestingly, the new parks could have an impact on existing national parks as demand for property there could fall slightly as second and holiday homeowners have more parks to choose from. They could even be an impact on the wider national property market as there will be less land overall available for development .... if the Government meets its target of protecting 30% of UK land by 2030.
Where will the new national parks and AONBs be? There have been no announcements on locations yet. The government has said that it will begin the formal designation process sometime during 2021.
Previous announcements might give us some clues, however. Proposals for new national parks, which did not materialise, were announced by the previous Conservative Government in 2018. In 2019 the Labour Party announced proposals for new national parks as part of its General Election campaign. At the time, possible candidates for the new national parks included the Malvern Hills, Chiltern Hills, Lincolnshire Wolds, North Pennines, coastal Suffolk, Dorset, the Cotswolds and Wessex.
So in summary what could all this mean? At this stage, it’s almost impossible to say. There is no guarantee that prices and demand will accelerate in the affected areas above any general rise (or fall) that might happen. There is no guarantee that these proposals will actually materialise at all. However, those within or near the locations that could become candidates for the new national parks and AONBs would be well advised to keep an eye on what this could mean for them.