Posh £1.2million newbuild flats in UK town dubbed ‘Chelsea-on-Sea’ left unsold for over a year as developer goes bust

A DEVELOPER who built a posh block of flats in a UK town dubbed “Chelsea-on-Sea” has gone bust after losing a bid to overturn a ban on second home owners. The four new-build homes in Salcombe, Devon, failed to sell after being listed for £1.2million amid claims it is because locals cannot afford to live there. The Salcombe block of flats built in a town dubbed ‘Chelsea-on-Sea’ Credit: SWNS Four new-build homes in Devon, failed to sell after being listed for £1.2million Credit: SWNS They are now back on the market – slashed in price by nearly half a million to just £750,000 – and with a rule in place they must be a primary residence. Developer Valentine London had launched an appeal trying to overturn a “primary residence” rule that was brought in to curb second home owners in towns such as Salcombe that have become overrun with holiday homes. Sign up for The Sun newsletter Thank you! The condition applies to all new build dwellings including the flats at Brewery Quay in Island Street. But the developer lost its appeal when it was rejected by the planning inspectorate who upheld the principal residency condition on all new build dwellings in the town. Its directors said it was a “flagship development” and the loss of the appeal has proved to be terminal. The company faced a winding-up petition from HMRC in late 2025 and entered liquidation following the high-profile planning dispute. And in a filing on Companies House posted in May this year, it was revealed the company was wound up by the High Court a month earlier after becoming insolvent. The court order read: “It is ordered that Valentine London Ltd be wound up by this court under the provisions of the Insolvency Act 1986 and that the costs of the petitioner of the said petition be paid out of the assets of the company.” Most read in The Sun The flats are now being advertised to the market by Luscombe Manor on instruction from Strettons Receivers — but for a slashed down price of £750,000. In the listing, the main reception areas were described as “very generous, with open-plan kitchen/dining area/sitting areas leading out through bi-fold doors onto the private balconies.” It concluded that the three-bedroom luxury properties were “now ready for immediate occupation.” The decision to block the developers bid to sell to second home owners was welcomed by locals with Salcombe Town Council stating: “It’s about keeping Salcombe a lived-in town, not just a postcard.” The flats are now back on the market but been slashed in price by nearly half a million – to just £750,000 Credit: SWNS Developer Valentine London had launched an appeal trying to overturn a ‘primary residence’ rule Credit: SWNS In its decision the inspector said removing the condition would “undermine” the purpose of the policy to “redress the balance of an unquestionably high proportion of second or holiday homes in Salcombe”. Welcoming the announcement, the town council said: “We want our streets to stay alive all year round, the school well-used, neighbours sharing a coffee and local shops and services supported by residents who call Salcombe home. “This decision helps reinforce the shared importance of protecting space for permanent communities in areas under intense second-home demand.” “We welcome everyone who loves Salcombe, whether you’re here all year, some of the year, or just visiting. What matters is that we work together to ensure Salcombe stays vibrant, resilient, and inclusive.” Original planning permission for the scheme was granted in 2020 by South Hams District Council to demolish existing buildings, and build commercial units on the ground floor and four residential units above. Salcombe Town Council claimed developers were aware of the restriction throughout – although this claim was disputed by the developers themselves. Despite this, the flats failed to sell, prompting the bid to remove the condition. 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.” The report also highlighted what it described as the “specific housing market dynamics in Salcombe.” 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 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. Nearly half of all dwellings in the town are already second homes or holiday lets. 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. South Hams District Council confirmed that no principal residency conditions in the area had been broken by developers yet. The directors of Valentine London were approached for comment. Speaking previously, one of the directors Andy Manning-Smith, refuted 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 pre planning 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 South Hams Council was on the day of the appeal. “We have applied to remove the condition as…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.” Comment now