SEASIDE HOMES VULNERABLE TO PRICE PRESSURE

All 25 seaside towns recording the largest increases since 2002 are outside southern England.

As the market slows, however, the South might be ready to set the pace again: Halifax says Rock in Cornwall topped the seaside town league in 2007 - up 28% to £361,900.

It was closely followed by Sandbanks, Dorset, (up 22% to £628,000); Fowey, Cornwall (up 20% to £342,900); Ainmouth, Northumberland (up 17% to £227,100) and Maryport, Cumbria (up 17% to 128,100).

Among those surveyed, the cheapest seaside town of the lot is Withernsea in the east Ridings of Yorkshire - up by 13% during 2007 to an average £116,900. Cheapest in the South-East is Newhaven, despite a 10% jump in 2007 to £181,300.

But the seaside boom might have started to tail off during 2007: Halifax puts the average house price growth for all seaside towns in England and Wales during 2007 at 8%, up to £208,400, against an average 14% rise for England and Wales as a whole.

More worryingly, a second report says seaside property might soon come come under more serious price pressure than the rest of the market - because it is largely driven by a demand for second homes which are a "non essential" spend.

Economics consultancy Capital Economics reckons that around 40% of holiday home owners have bought for investment purposes, while 40% want a holiday/retirement base and 10% buy because they are working away from home.

Although second homes account for only 1.6% of total owner-occupied housing stock, the proportion is much higher in some coastal areas - for instance, it is around 3.5% in South-West England. In London, 32,000 second homes account for 1.8% of the housing stock.

Using figures gleaned from the last big property crash of the early 1990s, Capital Economics reckons that if 20% of second homes - a total of 57,600 properties - go on sale as house prices fall by 20% to the end of 2009, it will only mirror the events of the early 1990s.

This will occur largely because owners are forced to reappraise the rising costs of owning a second home against falling values - and are likely to conclude that the investment is no longer justified.

Says the Capital Economics report: "Second home ownership is likely to be more sensitive to the future course of house prices than the demand to own a primary residence. As such, there will be less resistance to putting second homes on the market."

The report also says the new, reduced Capital Gains Tax (CGT) rate of 18% might persuade more second home owners to cash in their profits now.

There are widespread fears that the Government could bump up this figure soon as it struggles to balance its books.

Capital Economics also warns that the sell-off in second homes could be greater if redundancies in the City are worse than currently expected.

"Now the housing market correction is under way, expectations of falling prices will encourage this over-consumption mentality to go into reverse," the report says.

"This will add to downward pressure on house prices."

However, Peter Cornwell at Marsdens Cottage Holidays in North Devon says he is astounded by Capital Economics' conclusions.

"I still have more than 20 clients keen to buy holiday homes from £250,000 upwards, who continue to be attracted by tax and inheritance tax aspects of second home ownership," he says.

"In fact, somebody completed a purchase at £750,000 this week.

"Although capital gains might be uncertain for a year or two, many people continue to see financial attractions in a second home - plus the attractions of a free holiday from time to time."

:: HOUSE PRICE FALLS ARE NOT WORLDWIDE PHENOMENON

Although the Government claims that Britain's house prices and wider economy are at the mercy of global influences, a new analysis says falling house prices are not a worldwide phenomenon.

According to a report in The Economist magazine: "Only five countries suffered annual house price falls in the latest data to the first quarter of 2007 and two of these - Japan and Germany - have been in the doldrums for a decade."

Other conspicuous fallers in The Economist chart include Britain (-1%), Ireland (-8.9%) and United States (down 8.9% or 13.6%, depending on which local index you accept).

Elsewhere, house prices continue to race ahead with double-digit annual percentage rises in Singapore (up 29.8%), Hong Kong (up 28.2%), Australia (up 13.8%), Sweden (up 11.3%) and China (up 10.7%).

In Western Europe, substantial rises were recorded for the first quarter of 2007 in France (up 5.7%); Italy (up 5.1%) and Spain (up 3.8%), although many British owners are struggling to sell in each location.

Between 1997 to 2008, The Economist says the biggest rise in property prices was seen in South Africa (up 401%), Ireland (up 220%), Britain (up 202%), Spain (up 195%) and Australia (up 174%).

The Economist believes Spain has the worst glut of unsold new homes - and the number of sales there in February 2008 plunged nearly 25% on the previous year as Spanish banks tightened the supply of mortgages.

"Both Spain and Ireland have parallels with the American housing market, where the inventory of unsold homes has hit a 20-year high," the magazine says.

"Britain is something of an exception because the over-supply of homes is much less, thanks to much tighter planning restrictions than those in Spain and Ireland.

"Whereas housebuilding grew by 187% in Spain between 1996 and 2006, and by 177% in Ireland, the British increase was just 12%,".

:: PUT HOME PACKS ON LINE TO SPARE ENVIRONMENT

The controversial Government measure intended to speed up home sales - Home Information Packs (HIPs) - could be something of an 'eco-disaster', says one of their leading providers.

According LMS, a leading conveyancer and HIP provider, an estimated 1m property transactions each year could result in 171.6m pages of reports being printed: enough to devastate several forests, and a serious waste of precious resources if, as some reports suggest, many buyers don't actually bother to read them.

Now LMS is offering one free paper copy of a HIP for each seller while urging estate agents to stick to electronic copies only when it comes to showing HIPs to potential buyers.

Says LMS director Dominic Toller: "When agents realise that by sticking to electronic copies, they can save the equivalent weight of 12,700 Oxford Boat race crews in paper, perhaps they will think again."

LMS reckons the volume of paper consumed by HIPs in any one year is equivalent to 1,527 African elephants; enough to fill the boots of 21,538 Mini Coopers or using enough paper to stretch 1.2 times around the world.

"A free paper copy of a HIP is available should a customer specifically request it, but we ask agents to consider the environment before they order one," Toller says.

This colossal consumption of paper might be justifiable if buyers believe they help to avoid the purchase of a poor quality property.

But do they?

According to MDA, a Canadian firm involved in the the supply of HIPs: "More than 50% of buyers' solicitors are continuing to replace the searches in the HIP, and adding extra searches as standard, such as environmental and chancel searches to maintain due diligence for their client."

Estate agent Trevor Kent, a long-time opponent of HIPs, quickly latched onto this admission.

"Sellers pay £350 for a HIP, including a search, and they send it to a buyer's solicitor in the fond hope their sale will proceed quickly (because that's what Labour told them a HIP would do)," he says.

"In fact, the buyer's solicitor promptly repeats the search process at more cost to their client. No doubt, MDA and other pack providers must be delighted, because they stand to collect two fees for one and the same job."

:: GARAGES WANTED - BUT NOT FOR THE CAR

Although many homebuyers want to buy a home which includes a garage, there is a good chance it will be used as a granny annexe rather than a place to keep the car.

That's the conclusion of a survey from developer Galliford Try, which questioned 500 consumers during April to discover that 64% would like "an oversized garage with ample space for two cars plus additional storage space". Around 49% see a garage as either "important or essential".

However, Galliford Try, which includes the Home Counties developer Linden Homes, says 63% of its respondents no longer use a garage to house a car.

For many, the garage has become "a general dumping ground for household goods".

Says Galliford Try managing director Ian Baker: "If space to house the car as well as providing additional storage space is what homebuyers want, then we will increasingly see builders coming up with creative ways to provide this."

:: FLATS MAY TEMPT INVESTOR BIDDERS

The average flat offers just 750 sq ft of living space and cost just over £136,600, says a survey from Nationwide BS which shows they account for one of seven of all home sales in the UK.

The building society survey says flats take a 44% share of the market in London, but only 4% in the East Midlands.

For reasons which are not explained, the Scots get the largest flats - "generally having more floor area for each number of bedrooms than other UK regions".

In the last five years flat prices have zipped up by 49% - but the rise has been only 1.5% in the past year.

Flats are also accounting for a significant share of repossessions now going under the hammer with leading auctioneers - which will be good news for property investors trying to build up their portfolios.

In the Wilmotts/Andrews & Robertson sale in London on June 5, there's a guide of £86,000-plus on a newly-built block near the seafront in Margate, Kent, while a ground floor flat with allocated parking space in Whitstable, one of the most successful seaside resorts in East Kent, is guided at £115,000.

In Tottenham, North London, a first floor flat has a £100,000 guide. In Blake Buildings, a fashionably-designed complex in fast-improving Hornsey, North London, another one-bedroom flat is being sold with a guide of £190,000-plus.

INFORMATION: Andrews & Robertson (0207 405 7811).