House prices are dropping in some of the UK's most desirable seaside towns, with properties decreasing in value by up to 7% in the past year, according to data from Rightmove. The decline is attributed to Labour's crackdown on second homes and recent tax changes.
Price Drops Across the South West
In Cornwall, St. Ives and Lyme Regis have seen the steepest falls of 7%. Sidmouth in Devon experienced a 6% drop, bringing the average price to £450,971. Sandbanks in Dorset, known as 'Millionaire's Row', saw prices fall by 4%, with the average home now costing £1,119,945.
Hampshire and East Sussex
Lymington in Hampshire saw a 1% decrease to £545,926, while Barton on Sea in the same county dropped 2% to £496,143. Swanage in Dorset fell 3%, and Saltdean in East Sussex saw a 1% reduction.
Government Policies Impacting the Market
In April 2025, local authorities gained the power to charge a 100% council tax premium on second homes, with over 200 councils opting to do so. Chancellor Rachel Reeves also increased stamp duty to 5% on additional properties. These measures have contributed to a slowdown in the second home market.
Exceptions to the Trend
Only two of the UK's top 10 exclusive towns saw price growth: Canford Cliffs in Poole and Shoreham-By-Sea in West Sussex. Jamie Freeman of Haringtons UK noted that Canford Cliffs represents a genuine primary residential market, unlike Sandbanks which remains heavily second-home driven.
Nigel Bishop of Recoco Property Search said higher interest rates, inflation, and taxation on second homes have affected property values and will continue to fuel uncertainty among house hunters.
