As demand for UK coastal properties continues to grow, investors are weighing not only potential returns but also the rising risks posed by climate change. With property prices remaining high and affordability under pressure, understanding the balance between investment viability and long-term resilience is more crucial than ever.

Insurance firm Pikl has analysed publicly available property market data to identify the UK’s top 10 coastal investment hotspots. The assessment considers key factors such as Price-to-Income (PTI) ratios and flood risk levels, offering a comprehensive view of where investors can find the best opportunities while mitigating potential climate-related challenges. The findings also highlight how PTI ratios have evolved in recent years, reflecting broader trends in the property market.

1. South Shields, Tyne and Wear

• Average House Price: £213,713
• Projected Gross Annual Revenue as a Private Rental: £12,792
• Private PTI Ratio: 16.7
• Projected Gross Annual Revenue as a Holiday-Let: £16,630
• Holiday-Let PTI Ratio: 12.8
• Flood Risk: Low

South Shields offers the fastest return on investment amongst the UK’s coastal locations, with a strong rental market and low flood risk, making it a top choice for investors looking for long-term gains in either private rental or holiday-let industries.

–

2. Falmouth, Cornwall

• Average House Price: £573,130
• Projected Gross Annual Revenue as a Private Rental: £30,540
• Private PTI Ratio: 18.8
• Projected Gross Annual Revenue as a Holiday-Let: £39,702
• Holiday-Let PTI Ratio: 14.4
• Flood Risk: Moderate

Despite a higher property price, Falmouth’s significant rental revenue helps investors achieve a return faster than many other coastal locations across the UK, although the moderate flood risk should be considered when looking at properties.

–

3. Morecambe, Lancashire

• Average House Price: £222,454
• Projected Gross Annual Revenue as a Private Rental: £11,532
• Private PTI Ratio: 19.3
• Projected Gross Annual Revenue as a Holiday-Let: £14,991
• Holiday-Let PTI Ratio: 14.8
• Flood Risk: High

Morecambe remains a strong investment due to affordable property prices and a steady rental income, though high flood risk may impact long-term sustainability and is worth considering when it comes to exact location and insurance premiums. 

–

4. Gower Peninsula, Swansea

• Average House Price: £427,888
• Projected Gross Annual Revenue as a Private Rental: £22,056
• Private PTI Ratio: 19.4
• Projected Gross Annual Revenue as a Holiday-Let: £28,672
• Holiday-Let PTI Ratio: 14.9
• Flood Risk: Low

With a relatively low flood risk and high annual revenue, the Gower Peninsula is a desirable coastal location that balances affordability with profitability.

5. Dunbar, Scotland

• Average House Price: £333,023
• Projected Gross Annual Revenue as a Private Rental: £16,356
• Private PTI Ratio: 20.4
• Projected Gross Annual Revenue as a Holiday-Let: £21,263
• Holiday-Let PTI Ratio: 15.6
• Flood Risk: Low

Dunbar provides a solid investment opportunity with consistent rental yields, making it attractive despite its slightly higher PTI. Going down the holiday-let route for this location could knock up-to 4.4 years from the time it takes to be in profit. 

–

6. Bognor Regis, West Sussex

• Average House Price: £377,450
• Projected Gross Annual Revenue as a Private Rental: £16,116
• Private PTI Ratio: 23.4
• Projected Gross Annual Revenue as a Holiday-Let: £20,951
• Holiday-Let PTI Ratio: 18
• Flood Risk: High

A high flood risk is a factor to really consider in Bognor Regis, but strong rental returns still make it an interesting prospect for investors willing to mitigate climate-related risks.

–

7. Blackpool, Lancashire

• Average House Price: £192,137
• Projected Gross Annual Revenue as a Private Rental: £8,076
• Private PTI Ratio: 23.8
• Projected Gross Annual Revenue as a Holiday-Let: £10,499
• Holiday-Let PTI Ratio: 18.3
• Flood Risk: Moderate

Blackpool’s affordability makes it accessible for new investors, but a slightly longer return period means it suits those with a long-term vision the most. 

–

8. Scarborough, North Yorkshire

• Average House Price: £227,277
• Projected Gross Annual Revenue as a Private Rental: £9,480
• Private PTI Ratio: 24
• Projected Gross Annual Revenue as a Holiday-Let: £12,324
• Holiday-Let PTI Ratio: 18.4
• Flood Risk: Moderate

With stable rental demand and a moderate flood risk, Scarborough is an appealing coastal destination for investors seeking a balance of affordability and returns.

–

9. Aberystwyth, Wales

• Average House Price: £330,869
• Projected Gross Annual Revenue as a Private Rental: £13,776
• Private PTI Ratio: 24
• Projected Gross Annual Revenue as a Holiday-Let: £17,909
• Holiday-Let PTI Ratio: 18.5
• Flood Risk: Low

Investors in Aberystwyth can expect a solid return, but a slightly longer PTI suggests it is best suited to those with a patient investment strategy.

–

10. Largs, Scotland
Average House Price: £165,539

• Projected Gross Annual Revenue as a Private Rental: £6,876
• Private PTI Ratio: 24.1
• Projected Gross Annual Revenue as a Holiday-Let: £8,939
• Holiday-Let PTI Ratio: 18.5
• Flood Risk: Moderate

The most affordable option to get on the coastal property ladder, Largs has a longer PTI but remains a viable investment due to strong demand, its only moderate flood risk, and the low property prices in the area.

Cliff Ward, a holiday-let insurance expert at Pikl, says: “Over recent years, PTI ratios have climbed significantly, with property prices remaining high while rental yields, though rising, have not necessarily kept pace. This shift means that property investors must take a long-term view. Where once a five-year investment cycle could yield a return, today’s buyers may need to commit to at least 15 years before seeing a full return, assuming minimal gaps between tenants or a consistent holiday-let occupancy rate of around 60%.

“For those eyeing coastal investments, flood risk is an increasingly critical factor.

“Climate change is already influencing weather patterns, and the long-term viability of a property must be considered alongside its initial appeal. Locations with lower flood risk, such as South Shields and Dunbar, can offer greater predicted long-term security. In contrast, areas like Morecambe and Bognor Regis, while more affordable, can present greater exposure to flood-related challenges. Investors should carefully assess climate resilience and factor in rising insurance costs when making decisions. Coastal properties may be attractive for rental yields and lifestyle appeal, but with extreme weather events expected to intensify, long-term sustainability must be a key consideration.”