House prices have fallen across many of Britain’s most expensive seaside towns, with analysts pointing to weaker demand from second home buyers and recent tax changes affecting the market.
New figures from property website Rightmove show that prices declined in eight of the 10 most expensive coastal locations over the past year. Areas including Cornwall, Dorset, Devon and Hampshire recorded some of the sharpest reductions.
In Sandbanks, Dorset, one of the country’s best-known luxury coastal locations, average asking prices fell by 4 per cent in the year to May, bringing the average property value to just under £1.12 million.
Other popular seaside destinations also saw notable falls. Prices in Sidmouth, Devon, dropped by 6 per cent to around £451,000, while St Ives in Cornwall and Lyme Regis in Dorset both recorded declines of 7 per cent.
Property experts said the market for second homes had become more subdued following changes to taxation and broader pressures affecting the housing market.
Speaking to The Telegraph, Lucian Cook, head of residential research at Savills, said coastal markets with high numbers of second home buyers tend to be more sensitive to economic uncertainty because such purchases are often discretionary.
He said recent changes to second home taxation had likely contributed to weaker demand. Since April last year, councils in England have been able to impose a 100 per cent council tax premium on second homes. More than 200 local authorities have adopted the policy.
At the same time, the surcharge on stamp duty for additional properties was increased from 3 per cent to 5 per cent.
Analysts said some coastal areas had also experienced a surge in supply as owners sought to sell second homes, adding further downward pressure on prices.
Despite the broader slowdown, two locations in the top 10 recorded annual growth. Canford Cliffs in Poole and Shoreham-by-Sea in West Sussex both saw prices rise by 4 per cent, with average values reaching approximately £1.05 million and £456,000 respectively.
Jamie Freeman, a buying agent at Haringtons UK, told The Telegraph that the contrast between Sandbanks and neighbouring Canford Cliffs reflected the difference between markets dominated by second homes and those supported by permanent residents.
He said Canford Cliffs had a stronger base of full-time homeowners, helping prices remain more stable despite wider market pressures.
Researchers also linked recent falls to the reversal of pandemic-era trends. Coastal areas experienced strong growth during the Covid-19 period as remote working encouraged more buyers to move away from cities in search of larger homes and lifestyle changes.
In contrast to the southern coastal slowdown, several northern seaside locations recorded strong growth. Bootle in Merseyside was identified as the fastest-growing coastal market, with asking prices rising by 11 per cent over the past year.
Nearby Crosby also saw significant growth, with average prices increasing by 9 per cent to more than £433,000.
Richard Donnell, executive director at Zoopla, told The Telegraph that northern markets generally had fewer second home owners and had therefore been less affected by changes to taxation. He added that proximity to major cities such as Liverpool had supported demand.
Nationally, average asking prices edged down by 0.3 per cent this month, according to Rightmove, with the average property coming to market priced at £378,304.
Nigel Bishop, founder of buying agency Recoco Property Search, told The Telegraph that higher borrowing costs, inflation and additional taxes on second homes continued to affect confidence in parts of the housing market, including traditionally popular coastal areas.
Read full article in the Telegraph here: https://www.telegraph.co.uk/money/property/house-prices/house-prices-plunge-in-most-desirable-seaside-towns/
