House prices: The boat comes in for homeowners in seaside towns

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The Independent Online

Residents of Britain's seaside towns may dread this weekend as hordes of city dwellers descend for a break in the sun, but figures out today show that at least homeowners do better to live on the coast than to visit it.

Residents of Britain's seaside towns may dread this weekend as hordes of city dwellers descend for a break in the sun, but figures out today show that at least homeowners do better to live on the coast than to visit it.

The rise in the price of homes of three-quarters of seaside towns surveyed by Halifax has outstripped the growth rate for the rest of their region over the past three years.

Halifax, the UK's largest mortgage lender, said homeowners were clearly prepared to pay a premium for living beside the sea, with the priciest towns along the south coast.

The largest increase over the last three years has been in Padstow, the Cornish town that has turned into a retreat for Londoners attracted to the fish restaurants run by Rick Stein.

Prices in the north Cornish port town have surged by 144 per cent between spring 2001 and 2004 - from £109,833 to £267,445.

It is followed by Withernsea on the east Yorkshire coast, with a 143 per cent rise, and Cardigan in west Wales (126 per cent). Cornwall and Yorkshire each registered 4 out of the top 10 fastest-rising towns.

All the towns surveyed in Cornwall, East Sussex, Kent and Lancashire outperformed the increase in property prices in their region over the past three years. In most other areas, the majority of seaside towns recorded a higher price rise than the rest of the region. Only Dorset and Cumbria bucked the trend.

Jane Pridgeon, the managing director of Halifax Estate Agents, said: "Homeowners are clearly prepared to pay a premium for living beside the sea."

But the figures will revive worries that soaring house prices are destroying local communities as children of residents find it impossible to buy a home in the area they were brought up in. "The lack of affordable homes for the indigenous population is a major problem," an economic study by North Cornwall District Council reported last month.

Cornwall is seen as a prime destination for city dwellers looking to "downshift" from the urban rat race, or driven out by spiralling house prices. "There is a serious affordability gap in terms of housing which is partly driven by significant inward migration and the extent of second home ownership in the district," the report said.

Local residents say it is galling to see second homes standing empty for up to half the year. The problem is exacerbated by chronically low wages across the area, making North Cornwall the 21st hardest place in England for locals to buy a home, according to the Joseph Rowntree Foundation.

The council says it would have to build 620 affordable homes every year to meet the shortfall. "Allied to this is the need to drive up local wages, improve job skills and qualifications and increase the ratio of full-time jobs to part-time and seasonal posts," it says.

Ironically, one of the architects of the boom, Sir Edward George, who helped set interest rates as Governor of the Bank England during most of the last decade, chose Cornwall for his retirement. Sir Edward bought a house near Bodmin in 1998 for £650,000. Two years ago, it was reported to be worth £1.5m.

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