Coastal property: How to keep your head above water

Living by the sea or a river with the water dappling outside your window and gulls mewing in the distance is the dream of many, but a watery idyll could turn into a nightmare if your home floods. Sea levels are predicted to rise twice as fast as was forecast by the United Nations only two years ago – over a metre or more by 2100 and the Environment Agency warns that one in six people living in England are already at risk from being flooded, so why are agents still recommending buyers to buy on the waterside? The answer is because waterside properties not only fare better in a downturn, they also bounce back quicker.

Nigel Still of Stephen Noble Lane Fox in Bournemouth, Dorset, says "we've sold several mid- and top-range waterside properties recently, where prices dropped by 10 per cent in the depths of the market but have now returned to their pre-slump level. If the properties were 50 yards back, values would still be down 15 to 20 per cent. Water provides an absolute barrier against development on at least one side and sea view properties are not an infinite resource. I believe we could see prices rising by up to 10 per cent for the best locations by summer 2010."

In Devon and Cornwall, waterside properties are also sailing out of estate agent's windows. "Anything on the water is selling very well. People who have cash in the bank, which is not doing anything for them, are snapping up anything between £200,000 and £450,000," says Robin Trethowan of May Whetter & Grose, which sells property on the Fowey estuary.

The north coast of Cornwall is doing just as well. "We have continued to have a phenomenal response for anything waterside," says Nigel Colebrooke of Jackson Stops & Staff's Barnstaple office. Two cliff-top cottages at Bucks Mills, near Bideford, have both had offers above their guide prices of £250,000 and £300,000. The properties are 80 feet above sea level, so no danger here of flooding, nor are they likely to fall into the sea as the cliffs are made of granite. However, even if properties are susceptible to erosion or flooding, it doesn't seem to worry people who just want that awe-inspiring sea view. The adage "it won't happen to me" might also have something to do with their lack of concern.

"The view taken by most purchasers is that if they want a house on or close to a beach, if water comes in at times that is just part and parcel of owning that house. It certainly doesn't affect its saleability," says Nick Withinshaw of Jackson Stops & Staff's Chester office. "We deal with many properties in North Wales, which are bought mainly by second-home owners and all they want is waterfront. So, this market will strengthen more quickly than anything further inland". The basements of the houses on the seafront in Walmer, Kent regularly flood: "Despite that, people still buy them. They are right on the shingle but have stunning views," says Simon Grieves of Colebrook Sturrock (www.colbrookesturrock.co.uk, 01304 612197). And at St Margaret's Bay, near Dover, Mark and Gayle Sawyer and their children adore the position of their home, which is right on the beach. "It's not flooded since we bought the house last year, but it can get quite hairy if you get a spring tide and a winter storm surge at the same time. We have wooden boards on the ground floor windows to prevent the sea throwing the beach through our living room window. The view is quite spectacular – 180 degrees English Channel and on a clear day you can see Cap Blanc Nez in France." Savills' Weybridge office (01932 838000, www.savills.com) is marketing a sweet little semi-detached cottage, which has a garden running down to the River Wey and a mooring. "The river does flood occasionally and water comes half way up the garden, but it's a lifestyle buy and people are prepared to overlook the downside for the upside," says Simon Ashwell. The property is for sale for £545,000, the same price it was a year ago.

Being able to obtain buildings insurance is another consideration if you are thinking of buying by the water. Premiums might be higher or in a very few cases, it might not be available, but the Association of British Insurers has agreed that insurers will make flood insurance available to homes where the flood risk is no worse than a 1 in 75 annual risk.

Insurance companies still look at post codes rather than the actual property location, as Nigel Still found out. He lives at Canford Cliffs, Dorset – cliff is the key word to height here – but because his post code is the same as Sandbanks, some of which could be wiped out if the sea came up a metre, his insurance company increased their premium by 100 per cent on renewal. "My wife rang them up, explained where we lived, sent a map and photo and they backed down," he says.