From the pits to a rich seam of housing

As a new community rises in the North-east from the site of an old mine, Sam Dunn charts the advent of the model village

In four days, a family is to move into the first of hundreds of new homes being built on a former colliery in the North-east.

In four days, a family is to move into the first of hundreds of new homes being built on a former colliery in the North-east.

East Shore village, a 500-home, £5m community designed from scratch, officially opens on Thursday. It has already sparked some of the region's fastest-ever house buying, with 78 of the first 80 homes put on the market being snapped up in days.

The new properties have been erected on the site of the old Vale Tempest colliery, a once unsightly 32-hectare sprawl near Seaham in County Durham. It lay derelict for a decade as a morose reminder of a former industry powerhouse that as recently as 1990 had employed more than 900 people and boosted the economy of the North-east coastline community.

After 70 years of output, it had shut in 1993, a casualty of Britain's coal industry slump; few had much hope for the site's future.

However, new jobs in the financial services and retail industries have helped buoy the region, and now new housing is driving the regeneration.

The regional development agency, One NorthEast, along with the construction firms involved, is marketing the village by focusing on the homes' affordability - prices start at some £90,000 and rise to more than £250,000 - and their location, minutes from Seaham beach and the North Sea.

A recent survey by the Halifax suggested that living on the coast can be good for your wealth as well as your health. Its analysis of property prices in 100 seaside towns during the past two years revealed that homes in coastal towns around England and Wales grew by more than their regional average in seven out of 10 cases. In Padstow, on the north coast of Cornwall, the average price rose from £109,833 in the second quarter of 2001 to £223,084 during the same period this year.

Although the biggest increases were in the South-west and South-east, the most affordable seaside homes lay on the North-east coast.

Seaham, which borders East Shore village, was listed as having the second-cheapest properties in the UK. There, the average house price rose from £40,463 in the second quarter of 2001 to £51,615 during the same period in 2003, an increase of 28 per cent but less than the north of England average of 39 per cent.

However, given the new redevelopment, house price inflation can be expected to pick up. "The area has suffered a slow decline over the past decade but this village will help turn things round," says Phil Hughes, a director of One NorthEast. "The hope is it will help the area raise itself."

He believes the new homes will all be sold, despite prices starting at more than double the average cost of properties in neighbouring Seaham. "There seems to be no slowing in demand. We're confident demand will be there."

Susan Latimer, the sales and marketing director for Yuill Homes, one of three house-builders involved in the development, says: "The main thing we wanted was a design that gave people a community. There is such demand for this new housing and its location on the coast has helped."

Although it is no Poundbury - the Dorset model village that the Prince of Wales helped to create and which is built in a traditional architectural style - East Shore also has the ambition of becoming a blueprint community. It blends residential and commercial properties and has drawn on the area's heritage for part of its design. Green, open spaces have been laid out to fit round a mix of property types - two- to five-bedroom homes, shops, a home for the elderly and a community centre - and footpaths and cycle ways. Public works of art commissioned locally will reflect the coal mining history.

This heritage qualified East Shore's original colliery site for inclusion in a scheme devised by English Partnerships - an agency that works on regeneration schemes around the country - with help from One NorthEast. In this case, it is part of the English Partnerships "National Coalfields Programme", begun in 1996 to revive blighted parts of England's old coalfield communities - hit by job losses, contamination and dereliction in the wake of the pit closures of the 1980s and 1990s.

Seaham may not boast the picturesque sea views of Devon or the rugged Cornwall coastline, but East Shore village could offer opportunities for investing in a second property by the coast.

While Mr Hughes is aware of the social and economic difficulties caused by wealthy outsiders buying new homes and forcing up prices for local residents and first-time buyers, he also recognises its attractions to second-home buyers. "If you see it as an investment for the future, you may feel now is the time to buy. I would expect to see house prices in popular areas continue to rise."

David Hollingworth, a mortgage specialist at broker London & Country, says those seeking another home for personal use will usually need to put down a higher deposit since lenders are unwilling to lend at high loan-to-value rates for second houses.

If you want to rent out instead, you will need to arrange a separate buy-to-let mortgage.