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Last Updated: Monday, 30 August, 2004, 09:47 GMT 10:47 UK
House prices soar at the seaside
Padstow Harbour
Nine of the top 10 seaside towns are in the South West
People are prepared to pay more to live by the sea, with house prices on the South Coast soaring, a new report says.

The report by the Halifax says house prices in seaside areas have increased at a faster rate than elsewhere.

The biggest increase in the past three years was seen in Padstow, Cornwall, with the average house rising by 144% to almost 270,000.

Withernsea, Yorkshire, followed with a rise of 143%. It was the only area in the top ten not on the South Coast.

Discount reduction

The mortgage lender studied 100 seaside towns across the country.

Top ten coastal property hotspots
Sandbanks, Dorset
St Mawes, Cornwall
Lymington, Hampshire
Fowey, Cornwall
Padstow, Cornwall
Budleigh Salterton, Devon
Sidmouth, Devon
Lyme Regis, Dorset
Christchurch, Dorset
Swanage, Dorset

The most expensive place to live is Sandbanks in Dorset with an average house costing 386,140 - over 100,000 more than the next most expensive town, St Mawes in Cornwall.

The cheapest area to buy a coastal property is in Barrow-in-Furness in Cumbria, where house prices are averaging just under 70,000.

The Halifax report, which may be good news for people who already have property in the expensive areas, may also highlight the problem of affordable housing in the South West.

Paul Tyler, the Liberal Democrat MP for North Cornwall said local people can suffer because of the popularity of the area with second home owners.

He believes local services could be put under threat if many homes remain empty during the winter.

Seaside premium

Councils across Devon and Cornwall are trying to address the issue by reducing the second home council tax discount from 50% to 10%.

There have also been some planning changes to encourage developers to build more affordable homes.

Jane Pridgeon, from the Halifax, said: "Homeowners are clearly prepared to pay a premium for living beside the sea.

"The most expensive seaside towns are located in the South West but, increasingly, Welsh and Yorkshire seaside locations are recording significant price increases as well."

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