Buy beside the seaside

Despite a rocky market, coastal properties are more popular than ever. Graham Norwood reports on a waterfront project that's making waves
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We do love to be beside the seaside – and even in these cash-strapped times, we are willing to move house to be closer to water. A survey of 60,000 families by the British Urban Regeneration Association shows the five most popular places to move to are the coastal areas of Devon, Dorset, Somerset, Kent and west Sussex. But people's needs are changing subtly, according to property experts.

"Today's buyers prefer to overlook the water from a distance rather than have it lapping at the doorstep. The fear of flooding and crumbling bedrock has been the cause of this sea change," says Nicola Oddy of Stacks, a buying agency. "Tidal versus non-tidal is also a big factor. Purchasers unfamiliar with estuary tidal activity should proceed with caution. Buy a copy of a tide table and view at different times to get a good idea of the extent of low and high tide. Your beautiful view over water may be exchanged for one of mud flats for some of the day."

Even in our depressed property market, homes with water views appear to hold their value relatively well. Research by the Knight Frank estate agent, using Land Registry data, shows that property values in hitherto little-known ports such as Coverack in Cornwall and Croyde in Devon have risen by 87 per cent and 70 per cent since 2003, while the average for inland England is 40 per cent.

"Lower-key but often more picturesque locations seem to be weathering the credit crunch better than trendier towns," says Sandy Davenport of Knight Frank. She says that the legendary village of Rock, in Cornwall – a regular haunt of Prince Harry and dubbed "Chelsea-by-Sea" because of the number of second homes owned by Londoners – has fallen in price by 20 per cent since the spring. Yet prices in less prominent coastal areas "are still holding firm and even increasing," Davenport declares.

A typical "less prominent" resort is Exmouth, an unassuming Devon town dominated by tall, Victorian terraced houses. In 1997, a new harbour was built, gradually lined by 200 modern houses and apartments. Despite (or perhaps because) of it not being a haunt of the ostentatious, the harbour has attracted more discrete buyers. Even so, one is a well-known ex-MP, and another is a high-profile racing driver, both drawn by the resort's apparent anonymity.

Now the final phase of 39 new waterfront flats – most with views of the estuary leading to Exmouth harbour – has been launched at premium prices. It is one of the few schemes in the UK trying to attract "off-plan" buyers; most inland developments are being completed before advertising for purchasers.

"The scheme has a strong record of appreciation because of the water. The early four-bed houses we sold for £200,000 in 1997 peaked two years ago at £600,000," says Chris Fayers, the director of Eagle One, the developer. "We've priced the new homes to be competitive. A year ago they'd have been more, but not much more. The views will help them buck the trend," Fayers predicts.

The new phase, Regatta Court, is being sold through the estate agent Strutt & Parker (01392 215 631) and includes apartments with floor-to-ceiling glass walls offering some of the best estuary views in southern England. Prices range from £365,000 to £800,000; the latter is a local new-home record.

Fayers thinks that the estuary view may account for up to a third of the asking price on the largest homes on the top floor of the four-storey scheme. "All properties are price sensitive these days, but people recognise that sea views don't come up often," he says. "So we're risking launching the scheme before it's completed in August 2009. Whatever the market conditions, water views pull them in."

Before the market slowdown, homes with good views of the south coast routinely secured a 40 per cent premium over similar properties just inland. In less fashionable northern areas like Scarborough and Colwyn Bay the premium was less, but could still be 20 per cent or even more.

What will be the premium when the "new" property market appears after the current crisis abates? No one knows for sure. But the success or otherwise of Regatta Court in Exmouth may give us some clues.