A ‘posh’ block of flats in a town dubbed ‘Chelsea-on-Sea’ has become a ‘white elephant’ just four years after it was built. The four newbuild homes in Salcombe, Devon, have failed to sell for the listed £1.2million with claims locals cannot afford them while wealthy outsiders have been hit by a ban on second home ownership.Developer Valentine London is now trying to overturn a ‘primary residence rule’ that was brought in to curb second home owners in towns such as Salcombe – revealed this year as the priciest place to buy a seaside property.Rules limiting second home ownership were brought in after many seaside towns, especially in the southwest, became overrun with holiday homes. The principal residency condition applies to all new build dwellings meaning they can only be sold to people who will live there full-time, but the developers have said locals cannot afford their property without additional support. This block of four flats in Salcombe, Devon, has been empty since it was built, with developers left asking for an exemption from the local ban on second homes Salcombe (pictured), dubbed ‘Chelsea-on-sea’, is the most expensive place in the UK to buy a seaside property The block, developed by Valentine London, faces Brewery Quay, which is seen with the tide outValentine London has now launched an appeal after South Hams District Council (SHDC) rejected its bid to make an exception to the rule – and deemed it ‘dangerous’ to set a precedent.The appeal is due to be heard by the Planning Inspectorate next month.Original planning permission for the flats at Brewery Quay in 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 throughout and work was 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 Town Council said:  ‘Nothing in any document submitted persuades us to waver from upholding the principal residence Policy SALC H3 which is and has been very clear; “new unrestricted market homes will not be supported at any time”.’The applicant has at all times during the design and pre application process been aware of this policy.’Many other parishes are protected by similar policies and any deviation would set a dangerous precedent in and beyond Salcombe. This policy must be vigorously upheld.’ Original planning permission for the scheme was granted in 2020 with commercial units on the ground floor (seen with benches outside) and four residential units above Nearly half of all dwellings in Salcombe (seen from above) are already second homes or holiday lets but district councillor Mark Long said ‘we need people living here full time’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 its studies ‘paints a picture of a town divided between a population of asset rich retirees, in-migrants and holiday makers and a population of working age locals who increasingly cannot afford to live locally and who are, consequently compelled to move away’.It said the failure for the properties to sell has been ‘directly attributable to the existence of the condition’, arguing this could leave it only open to buyers who could afford the properties mortgage-free.’By depressing the price and ruling out those who need a mortgage, it is effectively providing a subsidy to those wealthy enough not to require any debt to fund the purchase,’ it concluded.Nearly half of all dwellings in Salcombe are already second homes or holiday lets but district councillor Mark Long said ‘we need people living here full time’.’What we’re looking for is to try and balance things out so that we actually have a vibrant, viable community,’ he added.He claimed the developer’s financial offer for affordable homes was ‘missing the point’, saying if Valentine London won, all areas with principal residence conditions would be at risk ‘right across the South West and around the country’.’And so I think it’s important that we try and 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 year before Salcombe is nestled on the west side of the Kingsbridge Estuary, just east of PlymouthSalcombe is one of 12 parishes in South Hams which have adopted principal residency conditions ‘to achieve sustainable communities’, alongside towns like St Ives, in Cornwall.SHDC confirmed that no principal residency conditions in the area had been broken by developers yet. Andy Manning-Smith, a director of Valentine London, has refuted the council’s claims that developers knew about the restriction when the homes were built.He said: ‘This was the first primary occupancy restriction in Devon. When we applied for preplanning 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 the apartments are unsalable at a proper price with the condition, which we told the inspector on the original appeal and highly unlikely to be mortgageable.’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.’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 on 2022, when it was £1.2m, but still left Salcombe top as the most expensive place to buy a seaside pad – ahead of Sandbanks.