Chelsea-on-sea flats by London developer unsellable due to ban

The four new-build homes in Salcombe, Devon, have failed to sell after being listed for £1.2M - with claims it is because locals can't afford to live there.

Developer Valentine London is now trying to overturn a 'primary residence' rule' that was brought in to curb second homeowners in towns such as Salcombe that have become overrun with holiday homes.

The principal residency condition applies to all new build dwellings including the flats at Brewery Quay in Island Street.

Valentine London has now launched an appeal after South Hams District Council rejected its bid to make an exception to the rule - and deemed it 'dangerous' to set a precedent.

The appeal is due to be heard by the Planning Inspectorate next month.

Developers are hoping to sell the homes soon. (Image: SWNS)

Original planning permission for the scheme was granted in 2020 to demolish existing buildings and build commercial units on the ground floor and four residential units above.

The council says the developers were aware of the restriction throughout and work was completed some time ago.

Despite this, the flats have not sold - prompting an initial bid last year to remove the condition.

Objecting to the developer's proposal, Salcombe Town Council said: "We have carefully read the applicant's planning statement. 

"Nothing in any document submitted 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’. 

"The applicant has at all times during the design and pre application process been
aware of this policy.

"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 planning documents, the developer argued the cost of homes in Salcombe compared to the local average wage meant the policy made the homes almost unsellable.

A spokesperson said: "Construction of the development is complete, and the homes have been marketed for some time without success.

"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." 

Some say the price of the homes are why they are not selling. (Image: SWNS)

The report also highlighted what it described as the "specific housing market dynamics in Salcombe."

It added: "As we understand it, the policy was motivated by a recognition of the effect that second homes have on the availability of housing for local people in this area. 

"The policy was therefore intended to ensure that any new homes constructed would be available to local people at prices that local households could afford.

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."

He said the developer's financial offer for affordable homes was "missing the point".

He said if the developer won, all areas with principal residence conditions would be at risk "right across the South West and around the country".

"And so I think it's important that we try and hold the line here," he added.

Salcombe is one of 12 parishes in the South Hams which have also adopted principal residency conditions "to achieve sustainable communities", alongside towns like St Ives in Cornwall.

Developers have spoken out about the flats. (Image: SWNS)

SHDC confirmed that developers have not yet broken down 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. 

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"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.