House prices in Britain’s most expensive second-home hotspots have been hit by the expected slump in City bonus money this winter, new research out today reveals.

Prices of homes in Sandbanks, Dorset, where homes on the exclusive strip of waterfront in Poole can sell for several million pounds, have fallen by up to 10 per cent since the summer, wiping out nearly all the gains made in the first half of the year.

The sharp decline in the South Coast’s most sought-after area for residential property is in large part due to what Savills, the property agent, expects will be a 60 per cent fall in annual bonus money going into housing this year, down from £5.5 billion last time to £2 billion over the coming six months.

Over the past decade homes in 15 locations along the coastlines of East Anglia and the South West have been favoured investments for wealthy Londoners. Prices there have, on average, risen by 287 per cent over the past ten years, according to research compiled exclusively for The Times by Savills. By comparison, average prices in England and Wales over the same period have risen by 182 per cent.

Yet over the next six months seaside resorts, from Burnham Market, in Norfolk, to Padstow in Cornwall, will see average prices stagnate – a fall in real terms. Prices should, barring a recession, rise only 1 per cent in the third quarter of next year and 2 per cent between October and December 2008.

The pattern of inflation in these prime regional second-home areas, dubbed the “red trouser belt” because of the preponderance of City types dressed down for the weekend, has tended to mirror the rampant price inflation enjoyed by prime Central London property. Lucian Cook, a director of research at Savills’s residential team, said: “These regional hotspots have been heavily driven by London wealth over the past five to ten years. In all cases the markets have parallels with prime Central London – significant wealth chasing limited stock in unique locations.”

Top-performing towns in the red trouser belt are seaside resorts, such as Padstow and Rock in Cornwall and Salcombe in Devon, that are within a four-hour drive for a Friday night commute, typically made by City husbands visiting families left in the holiday home for much of the long summer holidays. The areas have also earned some notoriety by attracting hordes of underage drinkers from public schools.

On the East Coast, Burnham Market and Walberswick, in northern Suffolk, have enjoyed the best price growth over the decade. Walberswick is favoured by City bankers mixing with wealthy media types – a number of properties are owned by the Freud family. House-price inflation in these areas has tended to be double that enjoyed by surrounding local areas, which have tended to be fed only by local demand.

Savills is also forecasting price falls in prime Central London property, particularly in the £1 million to £5 million price bracket. It predicts average falls of 3 per cent this quarter, and another 1 per cent between January and March, before rises of 1 per cent, 2 per cent and 3 per cent respectively over the next three quarters of 2008.

Prime Central London typically includes Kensington and Chelsea, Mayfair, Belgravia and St Johns Wood – the so-called broker belt – where billions of pounds of City bonus money, coupled with an influx of overseas wealth, has been ploughed into residential property, pushing most small flats and houses into the £2 million to £10 million price bracket.

Prices of one to two-bedroom flats could fall by between 5 per cent and 10 per cent even in prime London, because of oversupply, Yolande Barnes, head of Savills’s residential research, predicts.