These abandoned flats are a white elephant in our posh coastal city: they are so expensive we can’t even afford to live in them.

A ‘posh’ block of flats in a town called ‘Chelsea-on-Sea’ has become a ‘white elephant’ just four years after it was built.

Four new-build houses in Salcombe, Devon, have failed to sell for £1.2m, with claims locals can’t afford them while wealthy outsiders have been hit by the ban the ownership of a second residence.

Developer Valentine London is now trying to overturn a “principal residence rule” which was introduced to curb second home owners in towns such as Salcombe, revealed this year as the most expensive place to buy a seaside property.

Rules limiting second home ownership were introduced after many coastal towns, particularly in the South West, became overrun with holiday homes.

The main residence condition applies to all new-build homes, meaning they can only be sold to people who will live there full-time, but developers have said locals cannot afford to own their property without extra support .

This four-storey block in Salcombe, Devon, has been empty since it was built, with developers seeking an exemption from the local ban on second homes.

Salcombe (pictured), nicknamed ‘Chelsea-on-sea’, is the UK’s most expensive place to buy a seaside property

The block, developed by Valentine London, faces Brewery Quay, which is seen at low tide

Valentine London has now launched an appeal after South Hams District Council (SHDC) rejected its proposal to make an exception to the rule and deemed it “dangerous” to set a precedent.

The resource must be known to the Urban Planning Inspectorate next month.

The original planning permission for the Brewery Quay flats on Island Street was granted in 2020 to demolish existing buildings and build commercial units on the ground floor with four residential units above.

The council says the developers were aware of the restriction and the works were 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 Council said: “Nothing in any of the documents submitted would persuade us to abandon maintaining the SALC H3 Principal Residence Policy which is and has been very clear; “They will not be supported in no time in the new unrestricted market houses.”

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

“Many other parishes are protected by similar policies and any deviation would set a dangerous precedent in Salcombe and beyond. This policy must be vigorously upheld.’

Original planning permission for the scheme was granted in 2020 with commercial units on the ground floor (views with benches outside) and four residential units above.

Almost half of all homes in Salcombe (seen from above) are already second homes or holiday lets, but district councilor Mark Long said “we need people living here full-time”.

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

A spokesman said: “Construction on the development has now been completed 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 the sale and therefore the developer is requesting that the condition be removed or amended.

“In lieu of the main residence condition, the developer is prepared to offer a contribution towards the provision of formally affordable housing which would of course only be accessible to households with a local connection for occupation as residence main”.

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

The paper claimed the South Hams market was being driven, “not by working-age households on local incomes, but by demand for second homes and an influx of share-rich incomes from elsewhere”.

He said his studies “paint a picture of a city divided between a population of asset-rich retirees, immigrants and tourists and a local working-age population that increasingly cannot afford to live locally and that , therefore, they are forced to leave.” .

He said the failure to sell the properties was “directly attributable to the existence of the condition”, arguing that this could only leave it open to buyers who could afford the properties without a mortgage.

“By lowering the price and discarding those who need a mortgage, you are effectively giving a subsidy to those wealthy enough not to require any debt to finance the purchase,” he concluded.

Almost half of all homes in Salcombe are already second homes or holiday lets, but district councilor Mark Long said “we need people living here full-time”.

“What we’re looking for is trying to balance things out so that we really have a vibrant, viable community,” he added.

He claimed the developer’s finance bid for affordable housing was “missing the point”, and said that if Valentine London won, all areas with principal residence conditions would be at risk “in the South West and across the country”. .

“And so I think it’s important that we try to hold the line here,” he said.

The average value of a property in Salcombe (pictured) was recorded at £970,657 in a survey earlier this year, down from £1.2m the previous year.

Salcombe is on the west side of the Kingsbridge Estuary, east of Plymouth.

Salcombe is one of 12 parishes in the South Hams to adopt prime residence conditions “to achieve sustainable communities”, alongside towns such as St Ives in Cornwall.

SHDC confirmed that the developers had not yet breached principal residence conditions in the area.

Andy Manning-Smith, director of Valentine London, has refuted the council’s claims that the developers knew about the restriction when the homes were built.

He said: “This was the first principal occupation restriction in Devon. When we applied for pre-ordination and planning there was no principal occupation restriction, nor was there in the consent statement agreed with the council a month before the appeal.

“The point at which we knew South Hams Council asked for the restriction to be implemented was on the day of the appeal.

“We have applied to remove the condition as the flats cannot be sold at a suitable price with the condition, which we told the inspector in the original appeal, and are highly unlikely to be mortgageable.

“Despite numerous price reductions and incentive offers, the apartments have not found a buyer in the last three and a half years due to the condition of this site.”

The average value of a property in Salcombe was recorded at £970,657 in a Lloyds survey earlier this year.

This was a marked decrease from 2022, when it was £1.2m, but still left Salcombe as the most expensive place to buy a waterfront rig, ahead of Sandbanks.