Colwyn Bay Investment Location Guide by residential-estates

Built On Reputation

COLWYN BAY INVESTMENT LOCATION GUIDE

Residential Estates

Built On Reputation

Property investment guide COLWYN BAY This is a slightly unusual location-based feature. Normally, we focus on one of the UK’s better known and more populous cities but, in this section, we’re going to take a look at a relatively small destination; one with more specialist appeal. Situated in Conwy on the northern coast of Wales, Colwyn Bay isn’t especially large, and it isn’t witnessing billions of pounds’ worth of new inward investment. But what it does have is a thriving tourist industry, ambitious economic plans, and an excellent record of delivering great returns for property investors. It’s a fine example of a specialist tourist destination, and it illustrates why such markets can hold their own against opportunities in more headline-grabbing cities such as Manchester, Liverpool and Birmingham.

COLWYN BAY FAST FACTS REGION South West

POPULATION 34,284

2ND LARGEST Colwyn Bay is North Wales’ second largest business centre.

£904 MILLION Colwyn Bay’s economic value by October 2019 was £904 million.

Residential Estates

Built On Reputation

Why Invest in COLWYN BAY? At the most recent (2011) census, Colwyn Bay had a

which is a jewel in the crown of Conwy’s wider tourism

population of just over 34,000. That’s smaller than

industry. As a key seaside destination, it attracts a

the student populations of some of Britain’s larger

disproportionate share of a market that is, itself, one of

cities. However, that figure is potentially deceptive.

the most important in all of Wales.

For one thing, the town is part of a wider borough that actually represents the second largest concentration of

Of course, the town’s tourist revenues dipped sharply in

residents in North Wales, and one of its largest business

2020, and they may not fully recover until 2022. However,

communities.

bookings rocketed when the lockdown eased in 2020, and as the vaccination programme takes effect, property

More importantly, Colwyn Bay is very much a tourist town

owners can expect tenant demand to rise steadily in the

and much of its accommodation is given over to short-

years ahead.

stay visitors. Every year, thousands flock to the town,

KEY POINTS TO CONSIDER

One of Britain’s

Annual capital gains of

A growing domestic

Limited supply of tourist

most popular tourist

12.6%. (February 2021)

population.

accommodation.

destinations.

£ Comparatively

Average yields of 3.9%

Much higher yields (7%+)

Good prospects for

affordable property

across all residential

on short-stay properties

strong capital growth

costs.

properties (LiveYield,

(LiveYield, March 2021)

(Savills: 22.8% by 2025)

March 2021)

Residential Estates

AN OVERVIEW OF COLWYN BAY Colwyn Bay is a popular tourist resort on the northern

Staycation’. People, understandably cautious about the risks of infection in crowded indoor venues, have demonstrated far greater interest in booking holidays that focus on the outdoors and healthy physical pursuits.

coast of Wales. Set in Conwy County Borough, it affords access to seaside, coastal paths and, just a

Conwy has always been a honeypot for country-lovers

little way inland, wild mountain country that makes it

and its status has only been reinforced by recent

popular amongst walkers, climbers, mountain bikers

events. There will come a time when international

and host of other outdoor enthusiasts.

travel corridors open up again but, by then, hundreds of thousands of UK visitors will have descended on North

As such, it is ideally suited to cater for the changing

Wales for the first time. The region has an excellent

tastes of British holidaymakers. Since the onset of the

track record of winning back repeat visitors so local

Covid pandemic and the subsequent lockdowns, there

investors can expect long term demand to rise steadily

has been a marked resurgence in the ‘Great British

in 2022 and beyond.

Built On Reputation

117,203 34,284 12,000

County Borough Population (2017) Estimate

Town Population (2011 Census)

Tourism-related jobs: over

TOURISM nd 2 £900M Principal Industry: Tourism

The second-largest business centre in North Wales.

Value of tourist industry: £900m (Pre-Covid)

12,000 (2019) 7

Residential Estates

N o r t h wa l e s i s h o m e to WORLD renowned w ta e r f a l s .

TOURISM IN CONWY

Conwy had attracted an annual visitor expenditure

Over the course of 2019, before the coronavirus wreaked

of £904 million over the course of the last year. This

such havoc on the country’s economic data, North Wales

record-breaking sum represented an increase of

attracted nearly 30 million tourist visitors. In so doing, it

5% on the previous year - £41 million in absolute

outperformed all other Welsh regions and helped to grow

terms – and it was spent by approximately 9.4 million

an industry that already employs over 42,000 people.

visitors. As local media reported, this made Conwy “the most visited county in North Wales.”

With its mixed terrain, coastal attractions and a rich array of sports, leisure and outdoor pursuits, Conwy was always

The area’s success cannot be ascribed to a single

destined to capture a large proportion of this buoyant

feature, such as its Blue Flag beaches or sporting

regional market. Indeed, in September 2019, Scarborough

events. It’s the result of a strong mix of attractions,

Tourism Economic Activity Monitor (STEAM) reported that

of which the following are just a few examples:

Built On Reputation

s is home nowned

•

Adventure Park / Surf Snowdonia (a

watersports centre with artificial waves) •

Coastal walks and mountain trekking

•

Conwy Castle (UNESCO World Heritage Site)

•

Food festivals

•

Nature reserves (including Conwy Nature

Reserve) •

Ornamental gardens

•

Sailing and watersports activities

•

Venue Cymru (theatre, conference centre

and arena in Llandudno) •

Zipworld Fforest (zipwire experience) 9

Residential Estates

TOURISM IN COLWYN BAY Colwyn Bay itself is a key part of this visitor offering.

A related attraction is the Eirias Events Centre, which provides attractive venues for the public, businesses and clubs. It regularly hosts conferences and banquets, exhibitions, summer balls and concerts, both indoors and out, and it’s also a very popular wedding venue. It also offers a gym and a sports science facility.

Its beaches are one of its most obvious and popular attractions but the town boasts a host of other

Meanwhile, above Colwyn Bay lies the Welsh

entertainments and pursuits.

Mountain Zoo, where visitors can see penguins, snow leopards, chimpanzees, red pandas and

Visitors can enjoy a choice of parks and gardens, including

Sumatran tigers – to mention just some of its 140

the 50-acre Eirias Park, which is host to a sports complex

separate species. Set in 37 acres of scenic hillside,

that encompasses the Eirias Stadium and Colwyn Leisure

the zoo has welcomed a total of more than 8 million

Centre. The 6000-capacity stadium is home to the

visitors.

rugby team RGC 1404, which currently plays in the Welsh Premier Division. The leisure centre is equipped with a

For sports enthusiasts, there is not only Eirias Park,

6-lane swimming pool, water slide, and various relaxation

but a choice of golf courses, bowling greens, tennis

facilities including sauna, spa pool, health suite and gym.

courts, and even an athletics stadium.

Built On Reputation

TOURIST MARKET DATA • CONWY ACCOUNTS FOR 70,000 BED SPACES (24% OF NORTH WALES STOCK

• 78% OF SELF-CATERING VENUES ARE TAKING ADVANCE BOOKINGS • “OPERATORS EXPECT A SUDDEN RUSH OF ENQUIRIES AS SOON AS REOPENING DATES ARE ANNOUNCED” • TOURISM-RELATED JOBS: OVER 46,000 (CONWY)

• ECONOMIC VALUE BY OCTOBER 2019: £904 MILLION •

VISITOR NUMBERS: 9.39 MILLION

•

GVA GROWTH TARGET: OVER £1 BILLION

• CULTURAL RECOVERY FUND (COVID): £30 MILLION • 65% OF TOURISM BUSINESSES ARE TAKING ADVANCE BOOKINGS (MARCH 2021)

Residential Estates

COLWYN BAY SEA FRONT The town’s many attractions underline the point that it

The town’s main beach, also known as Rhos-onSea beach, is ideal for swimming and watersports, and has been granted Blue Flag status. Behind it are a host of related attractions: shops and cafes, a coastal cycle way and even a children’s puppet theatre.

has a great deal to commend it to tourists, but there is no doubting that its sea front ranks top of many visitors’

The long curve of the bay tends to be very busy

lists. A great family-friendly resort, Colwyn Bay has over

throughout the summer season and during

3 miles of sand and shingle beaches, which are safe, well

school holidays, but an ambitious programme of

maintained and flanked by an attractive promenade.

developments and investment is now aiming to

Built On Reputation

make Colwyn Bay a year-round attraction. The Bay has also benefited from a £16 million scheme that has In June 2019, the Welsh Government reported on

reduced the risk of flooding and coastal erosion while also

some of the most notable improvements to Colwyn

investing in new tourism amenities and supporting local job

Bay’s sea front. In a document entitled ‘Investment

creation.

in Colwyn Bay is Making a Difference’, it recorded over £2 million of spending on local buildings,

Later in the same report, the authors state that the “Welsh

together with “a £6.7 million Welsh Government and

Government investment in Colwyn Bay is part of its overall

Conwy Council investment in the waterfront, (which)

Regeneration strategy which has seen investment of over £800

has helped to improve the promenade as well as

million across Wales since 2014.”

beach access.”

Residential Estates

REGENERATION PLANS FOR COLWYN BAY The importance of the tourism industry is certainly not lost on the local authority, Conwy County Borough Council. In its Economic Growth Strategy, it notes that tourism “has a key role in this strategy, with focus on the development of year-round tourism – through reinforcing winter tourism, the development of a strong evening economy, and developing events and arts strategies.” In 2019, the Council published a detailed 10-year plan for enhancing the region’s tourism profile. In this Destination Conwy Management Plan 2019 – 2029, it notes: “Conwy County is Wales’ leading tourism destination, at 14

the heart of which is one of the UK’s top seaside destinations. Tourism is worth £887 million to the county, generated from 9.5 million visitors. Year on year our visitor numbers are increasing and the profile of Conwy and North Wales continues to grow.” What’s particularly important about the management plan is the clear intention to invest in local infrastructure and amenities. Simply put, the council is backing its proven tourist market winner, and seeking to draw ever-increasing numbers of visitors to the area. For Colwyn Bay, the county’s key

Built On Reputation

to Conwy County to £1 billion by 2027 •

Increasing the economic impact per visitor by an

average of 3% above inflation for the next 5 years •

Increasing the overall proportion of full-time jobs from

59% to 70% seaside attraction, the future is therefore looking

•

Opening opportunities to support a year-round tourism

increasingly promising.

offering across the county and for businesses in less-visited areas

It’s important to note that the Plan is building on a

•

Encouraging investment, innovation and

considerable amount of recent improvement works,

entrepreneurship across the tourism sector.

which – under normal circumstances – should have seen Easter 2020 breaking all visitor records. The

Any progress towards these impressive targets should spell

coronavirus may have thwarted that particular

fast-improving returns for local property investors. The most

ambition but once the lockdown is over, those big

obvious benefit would be the increasing visitor numbers,

investments should prompt a further upturn in the

of course, which would directly and immediately boost

town’s visitor economy.

demand for lucrative short-stay rentals. Those with serviced accommodation or properties aimed at the short-stay market should be particularly well placed to benefit.

ECONOMIC GROWTH TARGETS

However, the more general improvement in economic performance should see local standards of living rising, and the creation of more jobs within the town. These factors should both help to buoy up people’s average disposable incomes and the demand for property generally. This might prompt greater

Behind all this local planning and investment are

demand for conventional, longer-term lets but the overall

some key economic objectives. The Council lists

effect on the local property market could well be an increase in

these as:

average capital values.

•

Consequently, investors with property in Colwyn Bay could

Increasing the value of tourism across the

whole year

stand to enjoy a threefold benefit: good yields, strong demand

•

and a realistic expectation of continuing capital gains.

Increasing the economic impact of tourism

Residential Estates

THE NORTH WALES GROWTH DEAL All the improvements taking place at the local and county

industries, including tourism.

levels are great news for investors, but it’s also important to consider what is likely to happen to the wider regional

Returning to a point we made earlier, it’s worth

economy. Fortunately, the signs are good, and much of

recollecting that Colwyn Bay is the second largest

that is due to a recent agreement signed by the Welsh and

community in North Wales, and home to one of its biggest

UK Governments.

business clusters. Consequently, it’s very probable that much of this new expenditure will find its way into the

Signed in November 2019, the North Wales Growth Deal

town and the local supply chains that support it. Again,

is worth over £1 billion, and will drive the growth of key

that spells good news for the local property market. It

Built On Reputation

raises the prospect of more jobs, a growing population and more money in the pockets of potential tenants. It should also increase economic activity more generally, which should mean better returns for large private sector investors, and bigger tax revenues for the local authority. In both cases, that should support and encourage further spending in the area, creating a virtuous circle that would only improve the area’s tourism appeal.

Residential Estates

National 5-year tourism plan Another major public programme that shouldn’t be

share of the UK visitor economy as a whole.

overlooked is the Welsh Government’s 5-year economic plan for the national tourism industry.

The plan is supported by a £60 million fund for tourism businesses and related organisations. This includes a

In January 2020, Welsh ministers published the plan,

special, £10 million scheme known as Brilliant Basics.

which is entitled Welcome to Wales, Priorities for the

This, the Welsh Government explains, “is a new Wales-

visitor economy 2020 to 2025. Amongst its objectives is

wide fund that will support public, third sector and not

the intention to boost off-peak tourism, to boost spending

for profit organisations to deliver basic small-scale

on overnight stays and to give Welsh destinations a greater

tourism infrastructure improvements... It will focus on

Built On Reputation

the infrastructure needed to ensure that everyone feels

nationally, major schemes are developing that must

welcome – from fully accessible ‘Changing Places’ to wider

inevitably have a strong and positive impact on the

access improvements.”

town’s economy. Visitor numbers are likely to increase and local standards of living should improve in tandem

The remaining £50 million takes the form of the Wales

with the town’s rising fortunes.

Tourism Investment Fund (WTIF), which aims to support sustainable high-quality capital investment projects that

Of course, none of this has gone unnoticed by property

deliver “year-round experiences that are good for visitors

buyers and professional investors. Over the last year,

and host communities.”

demand for property has been increasing sharply, as have capital values, and developers have been putting

This constitutes yet another good reason to believe that

money into new projects designed to capitalise on all

Colwyn Bay has a bright future. Locally, regionally and

this forthcoming growth.

Residential Estates

COLWYN BAY’S HOUSING MARKET Despite all the disruption and economic damage wrought by the pandemic, the property market in Colwyn Bay remained very resilient. Different sources quote different

that the discrepancies in price growth figures are evidence of limited data and lags in data gathering – factors that can produce erratic results. Different indices measure price sentiment at different stages in the buying cycle, so it makes sense not to rely too heavily upon them, and to regard them as a

price data but a general upward trend is clearly evident:

general weather vane, indicating broad trends in the

Source:

positive, at least.

Home.co.uk Rightmove Zoopla, average price paid The Principality

Average Capital Gain +35% y/y +26% since 2019

Demand stems largely from the tourist industry,

+4.01% y/y

of course, but there is also rising demand from a

+13.7% y/y (Conwy)

A recent article in The Financial Times (March 2021) warns

movement of prices. Here, that trend is certainly

growing local population. Like many other popular tourist resorts in the UK, Colwyn Bay lacks new

Built On Reputation

are still comparatively low. The following are the average local values as quoted by different professional sources:

Home.co.uk

£236,493

Rightmove

£233,749

Zoopla, average price paid The Principality

£193,316 £224,068

To put this in context, the Land Registry notes that the average value of a typical UK property is £251,500. Clearly, then, despite their continuing price growth and despite strong tourist demand in a typical season, properties in the town are still affordable. This, together with good rental values, is a recipe for some excellent yields.

development space, and those new house-building projects that are approved are often met with local hostility. As a result, housing supply is limited. Local planners and housing associations are building new properties in the area but with so many existing properties dedicated to the shortstay tourism market, a shortfall between supply and demand is always likely to remain. That could maintain upward pressure on prices and, as the tourism market revives in 2022, average values could quickly accelerate. In absolute cash terms, however, average values

RENTAL YIELDS According to LiveYield in March 2021, rental yields in Colwyn Bay averaged at 3.9% across all property types. That alone is well ahead of the current rate of inflation, so it’s a respectable real-terms gain. However, that figure represents a blend of assured shorthold tenancies and short-stay rentals – i.e. holiday properties, and their respective performance varies considerably. ASTs typically deliver lower returns and, looking at a mix of property types across the town, it seems clear that well-chosen holiday flats can deliver much better yields. In March 20201, LiveYield found examples of individual flats delivering between 7% and 9%.

PROPERTY MARKET PREDICTIONS FOR 2021 AND BEYOND The Covid pandemic will not suddenly vanish in 2021.

believe, once there is some certainty that holidays can

However, the vaccination programme should help to see

go ahead, there is likely to be a flood of bookings.

the ‘R’ rate falling and it should also help to reduce the rates of hospitalisations.

But even if that flood doesn’t come in 2021, the foundations of the local rental market remain very

As the country progresses in its battle against the virus,

strong. Tourist preferences have changed since 2019,

the tourist market should gradually open up. Moreover, as

and resorts that offer more space and more access to

many hospitality businesses in Colwyn Bay already seem to

outdoor pursuits look set to stay popular for years to

come.

amongst tourists and tenants will tend to drive up average rentals.

On top of that, concerns about conditions overseas including the risk of viral mutations and lengthy quarantine

Collectively, these factors point to rewarding returns

periods - could deter many British tourists from taking

next year and beyond. Savills, for example, forecasts

their usual foreign holidays. If so, then there’s a good

that average values in the Wales will rise by a cumulative

chance that they will turn their attentions to some of the

22.8% by 2025. Hamptons is predicting growth of 3.0%

UK’s most popular resorts.

in 2022, and 3.5% in 2023.

That could produce a significant upswing in total rental

Those are broad national averages, but returns on

demand and, of course, the more profitable the market

popular short-stay furnished holiday lets could produce

begins to look, the more investors will start vying to secure

considerably better returns, in terms both of capital

marketable properties. More buyer competition will tend

values and ongoing rental yields.

to drive capital values upward, while more competition 23

Residential Estates

WE LOOK FORWARD TO HEARING FROM YOU For more in depth information in relation to property investment in Colwyn Bay or if you’re just looking for some professional advice, please contact our office, visit our website or drop us an email, you can also visit us at our brand new offices. Please use the details below. Are team of professionals are here to help in any way possible, please don’t hesitate to get in touch. We look forward to hearing from you.

Kinnerton House Bell Meadow Cuckoos Nest Pulford Chester CH4 9EP 01244 34 33 55 sales@residential-estates.co.uk www.residential-estates.co.uk

Built On Reputation