The four new-build homes in Salcombe, Devon, have failed to sell after being listed for £1.2 million — with claims it is because locals can’t afford to live there
In the swanky seaside town often referred to as ‘Chelsea-on-Sea’ a posh apartment block has turned into an unoccupied ‘white elephant’ because of a rule preventing second-home ownership.
The four luxury residences in Salcombe, Devon, which are priced at a steep £1.2 million each, have remained on the market unsold, allegedly due to the fact that locals can’t afford them.
Valentine London, the property developer behind the construction, is now calling for a ban on second-home owners to be temporarily lifted so someone can swoop in to buy the properties. The firm is challenging a ‘primary residence’ condition which has been brought in to stop rich incomers buying up holiday homes in local areas such as Salcombe, pushing house prices higher.
This policy mean that all new buildings are available solely for those who will use them as their main home.
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Following the refusal by South Hams District Council to relax this regulation — a move the council said could be ‘dangerous’ — Valentine London is now appealing the decision. The hearing with the planning inspectorate is set for the coming month.
The planning committee at Salcombe Town Council said that nothing in the application “persuades us to waver from upholding the principal residence Policy SALC H3 which is and has been very clear; ‘new unrestricted market homes will not be supported at any time’.” They added: “The applicant has at all times during the design and pre-application process been aware of this policy.”
The committee also warned against setting a harmful precedent: “Many other parishes are protected by similar policies and any deviation would set a dangerous precedent in and beyond Salcombe. This policy must be vigorously upheld.”
In contrast, the developer’s spokesperson highlighted the challenges faced due to the policy. “Construction of the development is complete, and the homes have been marketed for some time without success,” they said. “Feedback from the agents has been that the condition has been an obstacle to sale and the developer is therefore applying for the removal or amendment of the condition.
“In lieu of the primary residence condition, the developer is willing to offer a contribution towards the provision of formally Affordable Housing which would, of course, be accessible only to households with a local connection for occupation as their primary residence.”
The document claimed the market in South Hams was being driven, “not by working age households on local incomes, but by the demand for second homes and by an influx of equity-rich incomers from elsewhere”. It said its studies “paints a picture of a town divided between a population of asset rich retirees, in-migrants and holiday makers and a population of working age locals who increasingly cannot afford to live locally and who are, consequently compelled to move away”.
It said the failure for the properties to sell has been “directly attributable to the existence of the condition, which may render the properties unmortgageable and thereby effectively restrict the properties to those who can purchase without a mortgage”.
“By depressing the price and ruling out those who need a mortgage, it is effectively providing a subsidy to those wealthy enough not to require any debt to fund the purchase,” it concluded. Nearly half of all dwellings are already second homes or holiday lets.
District councillor Mark Long said: “What we’re looking for is to try and balance things out so that we actually have a vibrant, viable community. We need people living here full time.”
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He said the developer’s financial offer for affordable homes was “missing the point”. The councillor warned that if the developer triumphed, all regions with principal residence conditions could be in jeopardy “right across the South West and around the country. And so I think it’s important that we try and hold the line here”.
Salcombe is among 12 parishes in the South Hams enforcing principal residency conditions “to achieve sustainable communities”, similar to towns such as St Ives in Cornwall. The South Hams District Council (SHDC) confirmed that developers have not yet breached any principal residency conditions in the area.
Andy Manning-Smith, a director of Valentine London, hasfuted claims from Salcombe Town Council that they knew about the restriction when the homes were built.
He said: “This was the first primary occupancy restriction in Devon. When we applied for preplanning and planning the primary occupancy restriction did not exist, it also did not exist in the statement of common ground agreed with the council a month before the appeal. The point we were aware the restriction was requested to be applied by Sout Hams Council was on the day of the appeal.
“We have applied to remove the condition as the apartments are unsalable at a proper price with the condition, which we told the inspector on the original appeal and highly unlikely to be mortgageable. Despite numerous reductions in price and offers of incentives, the apartments have failed to find a buyer in the last three and a half years due to the condition on this site.”
Mr Manning-Smith also confirmed the primary residency policy does not exclude people from buying the property who are not based in the area as it’s not a local restriction, unlike a Devon covenant, but it would have to be classed as a primary residence.
