“Luxury Flats Left Empty as Second‑Home Rule Backfires”

The heart of the matter

In the picturesque seaside town of Salcombe, Devon—often nicknamed “Chelsea‑on‑Sea”—a row of four sleek, £1.2 million luxury flats remains unsold three and a half years on, empty and accumulating dust. At the root of this quagmire lies a well‑meaning yet controversial planning rule: all newly built homes in Salcombe must be the principal residence of the buyer. Valentine London, the developer behind these flats, took its plea to the national Planning Inspectorate this week, only to have its appeal rejected. The ruling confirms that the flats at the Brewery Quay development may only be sold to individuals who intend to live in them year‑round—a restriction the developer says has rendered the properties “unsellable”

A rule steeped in local necessity

To understand the controversy, we must go back to 2019, when South Hams District Council introduced a primary‑residence requirement in the Salcombe Neighbourhood Plan. The council, responding to a surge in second and holiday homes, opted to ensure new properties would serve the local community. With average house prices soaring to around £826,000, according to official data, and more than half of Salcombe’s homes classified as second residences, the policy aimed to stem a trend that threatened the fabric of local life.

Many towns across coastal and rural Britain have seen similar plans emerge. South Hams now includes 12 parishes with principal‑residence rules, and Salcombe’s implementation is seen as a flagged benchmark .

Developer’s perspective: unsellable assets

Cheltenham‑based Valentine London engaged in pre‑planning discussions with the council. The developer claims it was not aware of the rule when the project began, and that the “statement of common ground” signed only a month before appeal did not mention it. Still, the restriction loomed large. They marketed the flats both off‑plan and after completion, even slashing prices by 25 per cent. Yet no buyers emerged, deterred by fears of restricted resale or limited mortgage options due to the occupancy clause.

Andrew and Samantha Manning‑Smith, directors of Valentine London, put it bluntly: “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.” They argue the flats have become a “white elephant” .

Further compounding their difficulties, Companies House records indicate that a receiver has been appointed—suggesting the developer may be in financial trouble, potentially driven by these unsold assets.

Council’s perspective: vital for community survival

For Salcombe’s leaders and proponents of the rule, the occupancy condition is far more than administrative. Town mayor Jasper Evans emphasises that the strategy is not “anti‑second‑home” – acknowledging their economic contribution – but a defence of the dwindling permanent community. He points to declining numbers of residents, fewer families, less vibrant local schools, and risks to essential local services.

Evans argues:

“We want young people to stay in the town, work here, be part of the local economy and community.”

Echoing him, Councillor Mark Long stressed that relaxing the rule would “set a dangerous precedent” across the South West and other holiday locations, diluting efforts to maintain genuine year‑round populations in vibrant local economies.

When the Planning Inspectorate issued its decision, councils across the region took heart. They argue that conditions like Salcombe’s are “reasonable and necessary” to redress the imbalance caused by excessive second-home ownership. That imbalance, they say, undermines the vitality of entire communities.

The wider context

Salcombe’s is not an isolated story. Various Devon towns—such as St Ives, Inneston, Dartmouth and nearby parishes—have introduced or considered similar measures. In South Hams alone, nearly half the homes are second homes; county-wide, around 4,000 second homes exist. From April 2025, Devon councils will have the right to impose a 200 per cent council‑tax premium on second homes and holiday lets. South Hams councillors are actively campaigning to direct this extra revenue toward affordable local housing.

Meanwhile, Salcombe’s property market has experienced both peaks and troughs. Once crowned the UK’s most expensive seaside locale, average prices have dipped. Land Registry data points to a drop in prices over 2022–2023, largely due to declines after record‑setting sales in 2022, though more moderate market corrections have followed.

Yet flats—which often come with leaseholds and high service charges—have been slower to rebound. Many are seeing prolonged listing times and price cuts, a trend appearing in urban markets such as London and parts of the South East.

Legal clarity from the Planning Inspectorate

In its June 2025 ruling, the Inspectorate affirmed that removing the occupancy condition would undermine local policy objectives aimed at combating excessive holiday‑home ownership. It deemed the condition “reasonable and necessary” in pursuit of sustainable, permanent communities.

This unequivocal endorsement sets a clear legal precedent. Salcombe’s leadership lauds the decision. They emphasise it sends a strong signal to other coastal and rural communities under second‑home pressure: local planning bodies have the right—and now the national backing—to restrict new builds to principal‑residence usage.

Economic and social consequences

For local housing markets

Pros:

• Ensures new housing supports families, working residents and local employers—schools, shops, cafés.
• Helps maintain vibrant high‑street use and consistent year‑round demand.

Cons:

• Price reductions could discourage developers from entering such areas.
• Local buyers of new builds may still be priced out, even with conditions in place.

For developers and investors

Pros:

• Clear rules upfront can attract transparency.
• Local government may prioritise proposals with more long‑term community impact.

Cons:

• Limits buyer pool—investors and occasional visitors are automatically ruled out.
• Resale to future permanent residents may still be constrained.
• Mortgages may be harder to secure for properties with restrictive covenants.

For broader UK housing policy

Salcombe’s case typifies the tension between preserving community life and meeting market demand for holiday homes. Britain’s housing policy struggles to balance tourism-driven economies with access to housing for younger generations and year‑round populations. Measures such as principal-residence conditions, council‑tax premiums, and affordable‑housing contributions increasingly form part of local responses.

So, what happens next?

For Valentine London:

• The four flats remain vacant.
• Receivership hints at looming financial distress.
• Options are limited: hold for eventual resident‑buyers, rent as short‑term lets (though leased covenants often forbid this), or sell off-plan at steep discounts.

For Salcombe:

• Town leaders are buoyed by national support.
• May see further restrictions on future projects.
• Might benefit from 200% council‑tax premiums feeding local housing initiatives.

For other communities:

• Expect towns facing second‑home pressures to introduce or propose similar covenants.
• The decision offers a guiding legal framework to defend them.

For central policy:

• The Ministry of Housing may reinterpret its guidance, affirming local autonomy in occupancy planning.
• Greater coordination between local tax policies, planning and housing delivery may be in the pipeline.

A clash of values: permanence v prestige

Salcombe’s dilemma crystallises a broader national debate across popular regions—from South Devon to Cornwall and parts of the Highlands. On one hand, wealthy individuals—whether city residents or overseas investors—value the prestige and retreat offered by coastal luxury properties. On the other, local people—especially younger adults and professionals—need affordable, stable housing to maintain the social and economic fabric of these communities.

Allowing second‑home restrictions enabled, even encouraged by central policy, could bolster local agency. Yet, the complexity of supply, demand dynamics, property economics and legal forces pose stark challenges. Will developers shy away from towns with occupancy conditions? Will some places de‑prioritise growth for community sustainability? Can local plans withstand national housing pressures and expectations?

Final thoughts

Salcombe’s struggle is a microcosm of modern Britain’s housing crossroads. The empty flats—products of high-end design and stunning location—lie unsold, not because of a lack of demand, but because the local community chose to safeguard permanence over prestige. The developer’s ambulance‑chasing efforts failed where principle met policy, and for some, the decision feels like a victory for social equity; for others, it represents stifled investment and missed opportunity.

What unfolds next will matter far beyond Devon’s shores. As coastal towns weigh collective memory and continuity against economic allure, Salcombe will remain a case study in the power of place, policy and purpose.