HELEN RAINS says that the market in Morecambe and Blackpool is “rough”. The area manager for the Halifax estate agency talks tough, but times aretough on this stretch of the northwest coast. “It’s not been a good year,” she admits, “things have been pretty quiet. We’ve also seen a lot more repossessions. And we are not getting much new-build coming through.” There are (relative) bargains galore, but not much to tempt affluent northwesterners into these faded holiday resorts. The Halifax says that in Morecambe the average price of a home is £132,709 and in Blackpool it is £130,686, against a northwest average of £152,503.

For investors, big profits are history. Morecambe prices have risen 133 per cent in five years, 37 per cent in three years, and only 9 per cent in the past year. In Blackpool, the figures are 110 per cent, 32 per cent and 10 per cent.

On the face of it, both towns appear to be struggling, but beneath the similarities are striking differences. Blackpool is three times the size of Morecambe – the populations are 142,283 and 48,227 – so its problems are writ large. In July, the North West Development Agency (NWDA) claimed that Blackpool was in danger of reaching a “tipping point”, when economic and social deprivation become difficult to reverse.

It has been easier for Morecambe, unburdened by the supercasino fiasco and the need to improve costly tourist attractions – because most were demolished years ago – to find a way forward. The key to Morecambe’s survival lies in its attractiveness to what the American urbanist Richard Florida calls the “creative class”, individuals who want to live in “open and tolerant places”, often close to water. This group drives regeneration not in hard economic terms, but by creating a “feel-good” factor. It has happened in Amsterdam, for instance, and Brighton.

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And now Morecambe? There are regeneration plans led by Lancaster City Council, including a £15million scheme to overhaul the “guest-house ghetto” of the West End. But what increasingly marks Morecambe out from Blackpool are the efforts of private companies and individuals.

The magnificent Art Deco Grade II* listed Midland Hotel will reopen next spring after renovation by the developer Urban Splash, which will run it itself, a new departure for the property company. Rumour has it that hotel chains didn’t want the risk. Another special old building, the 1897 Winter Gardens, is being saved by a dedicated band of volunteers.

Adactus, a group of housing associations, has renovated 70 West End terraced properties, with another 30 under way. Prices start at £55,000 for a 50 per cent share, with rent at approximately £29 a week. These are attracting new residents such as Richard Taylor, 34, who moved into a three-bedroom terraced house last month with his wife Amanda and their four-year-old son, Joshua, from nearby Heysham. “Morecambe has changed a lot since I was a kid,” says Mr Taylor, a retail assistant manager. “It went downhill. But with the Midland Hotel and lots of play areas for children on the front, it’s getting a lot better.”

The site of the former Pontin’s camp near Morecambe has become Middleton Towers, a ritzy retirement village where residents pay up to £250,000 for one of the 570 gated units. And on the front, overlooking the sweep of Morecambe Bay, the Hazelmere hotel has been turned into 14 apartments by a local developer, Jackson’s. Two remain, a two-bedroom ground-floor 650 sq ft apartment at £175,000 and a top-floor two-bedroom 722 sq ft corner apartment at £199,000. The agent says that the others have mostly sold to retirees.

Kate Drummond, 36, agrees that Morecambe is benefiting from its heritage of interesting buildings and its classic seaside appeal. She felt sure enough about its potential to set up her own ice-cream business, Sunset Ices, in a traditional kitsch-pink van earlier this year. “What we really need though is a proper road from the M6 into the town,” she says. “The Midland is going to be fantastic, but I can’t see people from Manchester being too happy about sitting in traffic for more than an hour if they want to come for the weekend.”

In Blackpool, 40 miles to the south, the M55 delivers visitors straight off the motorway. The trouble is that not many of them want to stay for more than a day, never mind move here. The failure of the supercasino bid was a huge blow to a resort that had gambled all on the gaming tables. The NWDA reports that Blackpool requires a staggering £3,351 million in public and private funding to carry out an essential ten-year regeneration programme, including new homes and investment in higher education.

Last month the local paper reported that more than £57 million-worth of visitor accommodation was up for sale. Falling visitor numbers, bad weather and the smoking ban were blamed. Doug Garrett, the chief executive of the regeneration agency ReBlackpool, is blunt. “A lot of the hotels are not up to scratch,” he says. “They don’t offer what people have got at home.” Garrett wants owners and/or developers to think about putting two guesthouses together to make one large building, which would be divided into modern en suite hotel accommodation and private residential apartments. He acknowledges that this can work only if individuals are willing to put up hard cash.

A serious hurdle, identified by the Blackpool valuer Lesley Wilson, is home information packs, which are not mandatory for commercial premises until 2008. “To escape having to get Hips, sellers are keeping their properties as ‘commercial’ rather than ‘residential’,” she says. “This means that they are sold on for commercial use only.” Potential buyers are put off by having to seek change-of-use planning consent and go elsewhere, where the climate is more welcoming. Such as Morecambe, where it is already happening. Jackson’s has converted two large guesthouses at Sandylands into apartments, starting at £175,000 for 662 sq ft and two bedrooms.

Blackpool has seen the way the wind is blowing up the coast. Part of the rescue plan is to push the resort’s heritage. Blackpool Council has approached the Victoria and Albert Museum to create a new National Theatre Museum. A feasibility decision is expected later this month. After the last “big decision”, no one is holding their breath. But it is clear that something is seriously needed to breathe life into Blackpool once again.

Take a video tour of the most expensive property in Britain at: timesonline.co.uk/luxuryproperty

FACTFILE

The most expensive street in Blackpool is the Promenade, average price £225,101, . . . and the cheapest is Platt Street, average price £63,457, according to the Land Registry.

The most expensive street in Morecambe is Woodrush, average price £255,141, . . . and the cheapest is Graham Street, average price £66,714. Figures from www.mouseprice.com .

Contact information: Adactus, 01942 608715, www.adactushousing.co.uk ; Middleton Towers, 01524 855309, www.prestigiousvillages.com ; Hazelmere and Sandylands, 01524 842222, www.farrellheyworth.co.uk ; www.reblackpool.com , 01253 478909; www.nwda.co.uk , 01925 400100 JAYNE DOWLE

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