Investors in a controversial Cornish development have been offered their deposits back after the government announced that the project will be subject to a public inquiry that could take a year to complete.
The Office of the Deputy Prime Minister has decided to review two planning applications for The Beach, a development of 511 apartments and a hotel, restaurants and shops. This follows more than a year of wrangles between the developer, Ampersand, and residents at Carlyon Bay in south Cornwall, who have fiercely opposed building on the beach there.
About 150 people have so far exchanged legal contracts with the builder and have paid 5% or 10% deposits on flats being sold at between £342,000 and £850,000 each. The first units on the development were due to have been ready next year, but Ampersand admits it will now be at least 2006 — assuming the project continues. Ampersand has written to investors asking them if they wish to withdraw from the scheme free of charge.
Controversy has dogged the development ever since plans became public in May 2003. Local residents immediately objected, claiming it could damage the beach, and have now applied for Carlyon Bay’s coastline to be designated a village green under a little-used planning loophole. This will be the subject of a separate public inquiry in November. If successful, the scheme could be halted.
The Beach, two miles from St Austell, was to have been Britain’s first sale-and-leaseback holiday-home project. Buyers would have personal use of their flats for six weeks a year, mostly in winter. The developer would then let them out for most of the rest of the year. In return, owners would receive a pro-rata 5% rent guarantee for each of the first two years of ownership. The business model was based on each flat being let for 30 weeks or more each year, at an average weekly rent of more than £1,150. Most local rental agencies estimate that Cornwall’s summer season lasts 18 weeks.
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A restriction on the flats — contained in the 1991 planning permission on which the development is based — prevents the properties being lived in during January, or by the same occupant for more than one calendar month at a time. These measures were to ensure the scheme attracted holiday-home buyers rather than owner-occupiers.
Samantha Bussey, a London investor, who has already paid a 10% deposit on a two-bed flat, is sticking with the scheme. “I was surprised to see how enormous the development was and not at all surprised that the locals were up in arms,” she says.
“But where else in England can you walk out directly onto a beach? Normally, such access is available to a very few properties costing millions, so I think it’ll be a good long-term investment if it does go ahead.”