How Britain’s seaside towns became a battleground

Prices are up by as much as 53pc and councils are charging second home owners a 100pc council tax premium, reports Rachel Mortimer

The picturesque seaside town of Salcombe in Devon is peppered with cranes and the sound of building works on one of the most hotly contested property battlegrounds in the country.

Dubbed “Chelsea-on-Sea”, the town has long been popular with wealthy city dwellers in search of a coastal bolthole, with more than half of its properties classed as second homes.

It is now the most expensive seaside location to buy property in Britain after knocking the prestigious neighbourhood of Sandbanks, in Dorset, from the top spot.

The pandemic turbocharged Salcombe’s popularity and the average house price surged by a third last year to more than £ 1.24m, according to analysis by lender Halifax.

Nearby Dartmouth and neighbouring Kingsbridge are the seventh and eighth mos t expens i ve coastal locations in the country, with average property prices of £567,985 and £556,659 respectively, the lender said.

In contrast, the average property value in a seaside location in the UK is just above £ 304,000 – up from £292,842 in 2021.

But not everyone is happy to see property prices soar.

Ever-rising values are widening a gap between locals and second home owners.

The first rung of the property ladder has risen further out of reach for local buyers amid the inf lux of bidding wars and cash buyers who can outbid people relying on mortgages – which have become far more expensive since the Bank of England began raising interest rates more than a year ago.

Andy Wood, of Kingsbridge Estate Agents, said: “The challenge for local people is buyers from other parts of the country buying down here often use cash.

“In recent years a lot of cash has been dangled in front of vendors and you can’t blame them for taking an offer which comes in at £50,000 over asking price.”

The South Hams district council – the local authority that includes Salcombe, Dartmouth and Kingsbridge – has just under 8,000 second homes

and short-term lets, equivalent to 12pc of its housing stock.

Holiday homes are more concentrated closer to the sea, however the fallout from rising prices has spread throughout the community and in September 2021 the council declared a housing crisis.

Judy Pearce, leader of South Hams district council, said: “The housing shortage is absolutely critical here. Hundreds more short-term lets and second homes are set up in the area each year and it puts the rest of the housing stock under a huge stress.”

Earl ier this year the counci l unanimously voted for a 100pc council tax premium on second homes in the South Hams.

It joins other councils in tourist hotspots, such as Cornwall and Whitby, North Yorkshire, in doubling the levy for people who do not live in the area permanently.

It comes after the Government gave local authorities the power to double council tax for second home owners as part of the Levelling Up and Regeneration Bill, which is winding its way through Parliament before becoming law.

The t hreat of a double council tax bill has already caused some second home owners to consider selling up.

Mr Wood said: “More second homes have come back onto the market in recent months. Some are owned by average- earning couples who can’t afford higher mortgage rates and the prospect of a huge council tax bill.”

Ms Pearce added: “Local people deserve our support. I feel so strongly for the families trying to bring up children, but are constantly on the move because their landlord has evicted them in favour of turning the property into a holiday let.”

In nearby Kingsbridge, where house prices jumped by 20pc last year, the local food bank is in overdrive.

Kim Kinnaird, of Halifax, said second home ownership undoubtedly played a role in driving up prices in the most desirable locations.

Ms Kinnaird said: “While house prices in any location are driven by factors such as supply, demand and interest rates, there are also socioeconomic factors at play.

“Some of these factors are more acute in coastal communities and many towns most in need of investment also sit near the shore.

“For many, owning a home by the sea is an aspiration, with coastal living offering beach walks, clean air and other health benefits. But this comes at a price.”

The biggest house price growth in a coastal location was recorded in Yarmouth on the Isle of Wight, where average property values jumped by 53pc last year to more than £611,000, Halifax found. Last month Isle of

‘For many, owning a home by the sea is an aspiration. But this comes at a price’

Wight council confirmed it would charge a council tax premium to second home owners, but the size of the premium is undecided.

Aldeburgh, in Suffolk, recorded the second highest house price growth last year, with values jumping by 47pc from roughly £539,000 to just under £795,000.

Sharnie Rogers, of Strutt & Parker estate agency in Suffolk, said the town has always been highly sought after by second home owners. A pretty high street of independent shops, restaurants and pubs, plus easy access to north and east London has long made it a weekend haven. It is also close to Sutton Hoo, the site of a remarkable Anglo Saxon burial ground, which was recently the subject of a Netflix film starring Ralph Fiennes.

She said: “Not many places come up for sale in Aldeburgh, so there is little stock but the area is in high demand. Most people buy a property as a second home and then relocate permanently once retired and their home in London or the city then becomes their second property.”

The Suffolk town is now the third most expensive coastal spot in the UK and buyers need an average of £794,000, compared with just shy of £540,000 in 2021.

Ms Rogers said: “The closer to the coast a property is the higher premium it carries. We sold a two-bed terrace on the front for £750,000, but if you move back a few streets the same property would drop quite a bit.

“In the coastal areas of Suffolk over the past couple of years bidding wars between buyers from out of town were not uncommon.

“We had numerous situations where two London buyers would compete and end up offering £100,000 over the asking price.”

The average house prices in Salcombe rose by a third last year