The tide turns against beach huts as charges erode seaside property prices

Just one year ago buyers fought to snap up prime pieces of seaside real estate, pushing prices to record levels. Now it appears the beach hut boom is over, with their value halving in less than six months.

Just one year ago buyers fought to snap up prime pieces of seaside real estate, pushing prices to record levels. Now it appears the beach hut boom is over, with their value halving in less than six months.

The slowdown in property prices and increased council charges have left some owners wondering why they were so keen to spend more than £100,000 on a windowless shack.

One of the country's most exclusive beach hut enclaves, in Mudeford in Dorset, now has no less than 22 sites for sale. The beach, between Christchurch Harbour and Christchurch Bay, boasts stunning views of the Needles on the Isle of Wight and is a haven of tranquillity as cars, mains electricity and fast food outlets are banned.

Only last November, a wooden hut at Mudeford was sold for £140,000, despite the fact that it was just 16ft by 12ft and had no electricity or plumbing.

The Mudeford beach is unusual because, unlike most other sites in Britain, the owners are allowed to sleep in their little sheds. But last week, a Mudeford hut failed to reach its £80,000 reserve price at auction.

Jim Atkins, chairman of the Mudeford Sandbank Beach Huts Association said: "They were selling for between £120,000 and £130,000 in their peak. There are 22 beach huts for sale at the moment whereas in past times as one came on to the market there was someone who wished to buy it."

He blamed the slump on the "onerous" costs imposed by Christchurch Borough Council. The annual site rent for a beach hut will cost £1,748 from 1 April, while a transfer fee payable to the local authority in the event of a sale will rise to £1,033 per square metre, making the fee for an average-sized hut measuring 20.25 square metres nearly £21,000.

Mr Atkins said the transfer fee had increased by almost 50 per cent a year for the past four years. "A lot of people who have owned beach huts for a very long time are now finding that the cost of owning one is prohibited by the amount of site rent and also the fact that they are seeing that a significant slice of what is their equity would have to be paid to the council if they decided to sell."

With the boom in property prices having become a slump, it seems beach huts are also falling in popularity, despite an aristocratic heritage.

They evolved from wheeled bathing machines used by Victorian women to protect their modesty. George III used a bathing machine at Mudeford in 1801, while Queen Victoria installed one at Osbourne House on the Isle of Wight in the 1840s.

By the early 20th century, they were looked down on as "holiday homes for the toiling classes", but then their fortunes revived again. In the 1930s, George V and Queen Mary spent the day at a beach hut in Sussex, and other owners have included the Spencer family and Sir Laurence Olivier.

The Queen's beach hut in Norfolk was destroyed by fire in 2003. The building had been owned by the Royal Family for 70 years and was known to be much loved by the monarch. More recently, the artist Tracey Emin sold her Whitstable beach hut to the collector Charles Saatchi for £75,000.

Hut owners have warned that they are easy targets for vandals and arsonists during the summer months. Extreme weather conditions at some British resorts may also have put many people off buying huts.

In 2003, a very high tide at Southwold in Suffolk left more than 50 huts damaged beyond repair. One had sold for more than £45,000 just a few months earlier, but many owners did not have insurance and lost everything.

The property boom in beach huts began in the 1990s, when they achieved a 1950s-style retro glamour among trendsetters. Half a century ago, a beachside hut would have cost around £90. Two years ago, 18 huts at Branscombe, east Devon, sold for £2m.

TOP OF THE MARKET

MUDEFORD, DORSET

Prices for beach huts in Mudeford soared when families realised their suitability as a holiday home near London. In October 2004, a family sold theirs for £120,000.

SOUTHWOLD, SUFFOLK

In 2003 a hut here sold for £45,000 and others have generally been on the market for £50,000-£60,000, leading local people to complain about property investors.

EYPES MOUTH, JURASSIC COAST, DORSET

In July 2003, 15 one- and two-bedroom wooden chalets with views from Lyme Bay to Start Point were sold for £1.7m, or £113,000 each.