Second home buyers will be locked out of a popular seaside town in south Devon under council plans to ban them from snapping up new-build properties.

Salcombe has been dubbed Chelsea-on-Sea, after demand for second homes sent property prices soaring over the last decade, making it a millionaire hotspot.

However, now the local authority has agreed that all new-build homes in the town can only be bought as a "primary residence", and in fact must stay that way even after they are sold.

The move beefs up previous restrictions designed to curb second home ownership, which required new-build homes to be occupied by people with ties to the area.

South Hams District Council said in a report this week that the previous stipulation would often get “lost or overlooked” when the house was resold a few years later.

Around 57 per cent of homes in Salcombe are already classed as second homes, according to recent figures. The average wage in the town is below the national average, but the house price boom has meant the cost of buying a home is around £750,000.

The latest amendment to the council’s neighbourhood plan says: "This policy is as a result of impact upon the local housing market of second or holiday homes. This occupancy restriction will therefore require the imposition of a legal agreement. New unrestricted market homes will not be supported at any time."

Early morning over Salcombe, with yachts filling Kingsbridge Estuary

Credit: Getty Images

The plan added: “The consequence of the high value placed on market housing which attracts primarily second home owners is the lack of supply of properties for younger working people and families. These families move away from the parish.”

The council insisted that the plan was not “anti-second home owners”, whom it recognised made a “valuable contribution to the local economy and social fabric of the town”.

It continued: “This policy will support the housing needs of local people, and bring greater balance and mixture to the local housing market and create new opportunities for people to live and work here, and strengthen the community and local economy."

The neighbourhood plan will now be assessed by an independent examiner before it is officially signed off.