Why homes by the sea are weathering the property slowdown

Published 10th Mar 2008

The coastal scene is staying buoyant in spite of gloom in the housing market.

Brighton doesn't even have sand. Torquay aside, there aren't many non-plastic palm trees around. And, apart from a few days here and there, there's barely a glimmer of sunshine. But we do like to be beside the seaside.

The demand for a home on the coast has pushed prices out of reach of many local workers. Now there are calls, reported in The Times this week, for councils and the Treasury to do all they can to deter people from buying second homes in popular areas, so as to restore affordability. Yet agents report that buyers of second homes are in short supply for the first time in years, as they delay non-essential purchases.

Half the places tipped by the Halifax to be this year's new housing hotspots are on the coast. They are Aberdeen, Greenock, Newport, Liverpool and Chatham. “Overall, we forecast house-price growth will be flat,” says Martin Ellis, Halifax's chief economist. “But the coast will be buoyed by the retirement market and continued regeneration.” Aberdeen has grown rich on oil, Greenock is enjoying spillover from Glasgow, Liverpool is European City of Culture 2008, and Newport is embarking on major regeneration plans.

Likewise, Ellis says: “Chatham will see some of the biggest growth because of big infrastructural improvements.” Its fortunes are changing because of the huge £97 million Thames Gateway project. Other Medway towns benefiting are Rochester, Strood and Gillingham. Dickens, who spent part of his childhood in Chatham, would not recognise the docks where 1,500 homes are being built, and what would he make of the new Dickens World attraction with its Great Expectations Ride? With an average house price of £195,211, Chatham trades at a 31 per cent discount for the South East. “Not for long,” says Liam Bailey, Knight Frank's head of research. “Margate is another town to watch.” Broadstairs is also tipped to grow (a two-bedroom house is £150,000).

“The South East coast is all about commuters,” says Sandy Davenport, head of waterfront at Knight Frank. “The South West is all about second-homers. Devon and Cornwall remind us of wonderful childhood holidays. We want to recreate those for our children. I just sold a £5millon house in Lerryn in Cornwall that's going to be a third home.” Is this snapping-up of weekend boltholes or retirement homes pricing locals out? In many villages the flow of weekend visitors - often more patient with the financial drain of restoring ancient cottages - has helped to create demand for services (and jobs) enjoyed by locals. Davenport says: “They're the ones choosing to profit from selling their homes.”

Long-term locals hoping to downsize and free cash for their offspring might therefore be reassured that there is little prospect of prices plummeting in places such as Rock, where, Davenport says, “there's a building plot on the marker for £3.5 million right now. Houses with views and direct access to the beach go for about £6 million. But the best houses rarely come on the market.”

Buyers, meanwhile, may still have to look farther along the coast for value. Padstow, nicknamed Padstein after the piscatorial resident restaurateur, has also been overfished by hungry buyers. “Constantine Bay is still affordable,” says Davenport. “But north Devon is most exciting right now.” Hotspot-seekers and surf dudes should head to Woolacombe. “Prices practically doubled there in the last 18 months. You can still get a four-bedroom Edwardian family home for £600,000 or £800,000 if it's got sea views.” Nearby Croyde is also attracting attention.

The East Coast is also worth a look. “Whitby and Scarborough are great value compared with inland towns such as York and Harrogate,” says Ellis. “It's beautiful there and the housing stock is excellent. They're cheaper because access is bad. Improving the A64 would boost prices.” Bailey agrees: “It's also worth looking at smaller towns such as Filey and Bridlington.”

Coast to coast - despite the current feeling of chill - the great British seaside has not been this popular since the Victorians pitched up in their bathing machines.

Damian Barr

Source: ' 'The Times' '

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