The cheapest flats in the next stage of a controversial seafront redevelopment will be marketed for at least £400,000 – sparking fears locals are being priced out.
Developer Chelsea Portfolio Ltd has announced that phase two of The Residence, in Marine Parade, Hythe, will launch in September 2025, with work expected to finish by February 2027.
The project will see Pensand House – once home to council tenants and private renters – transformed into 32 new apartments and six floor-to-ceiling glass penthouses described by the company as “the very best on the south coast”.
But with starting prices of £400,000, campaigners say the homes are out of reach for many local families.
The redevelopment has already proved divisive in the town.
Earlier this year, residents of Pensand House were served court orders and evicted to clear the way for construction. Many said they felt abandoned by the council and feared being left homeless.
One former tenant told KentOnline: “Since the plans went in, the whole building has been completely neglected.
“We’ve been let down by the council, and I don’t know where my family and I are going to live.”
The process mirrored what happened at neighbouring Marlborough Court in 2023, where tenants were forced to leave to make way for the first phase of The Residence.
That created 20 new flats with views across South Road football pitches towards St Leonard’s Church.
Mayor of Hythe Stephen Bailey says he is concerned about the lack of affordable housing in the town.
“I’m Hythe born and bred, and I would like to think my children would be able to stay in Hythe,” he told KentOnline.
“They’ve decided not to deliver affordable housing in this development.
“It will be a very high-class development, and it will look attractive and won’t impact the aesthetic of the area.
“But house prices in the town are becoming quite scary, and this development is no different.”
Despite concerns the new properties – marketed as luxury homes – will not be accessible for local people, Chelsea Portfolio insists the project is a positive step for the town.
A spokesperson said: “Phase two sits literally on top of the promenade and has stunning views of the sea.
“Prospective purchasers can register their interest now via our website.
“The building has served the local area by providing affordable rental homes to everyone – working and not working – but now the time has come to move forward and provide stunning homes in an iconic building that will stand proud on the Hythe shoreline.”
They added that phase one has been well received, with “a huge number of viewings” and several buyers waiting to sell their existing properties before moving in.
“Currently seven of the flats are occupied,” the spokesperson added.
“We could have sold them all if we had allowed short-term lets and Airbnbs, but our focus is on providing high-quality, prestigious homes for people to live in.”
Two-bedroom homes in the first phase are priced from £300,000, while larger apartments cost up to £499,000.
Property prices in Hythe have risen sharply in recent years, with the average now more than £410,000, according to Rightmove.
Nearby developments such as Folkestone’s Shoreline Crescent, where penthouses are priced from £1.8 million, have also raised questions about affordability along the coast.
While Folkestone & Hythe District Council says it is working to increase affordable housing, including 26 new homes at the former Smiths Medical site in Boundary Road, critics argue these do not go far enough to meet demand.
Chelsea Portfolio says phase two will deliver “high-quality specification throughout” and the penthouses will be marketed as the most prestigious homes on the south coast.
The developer is already inviting potential buyers to register their interest.
