Scores of second-home owners hit by the economic downturn have decided to sell up, bringing an unexpected vibrancy to the property market in the country's favourite beauty spots.

Estate agents operating near the coast or in picturesque rural locations are reporting a sharp increase in sales and deals last month. Bargain hunters are snapping up houses that two years ago they were unable to afford or which rarely came on to the market. The trend is expected to continue as buy-to-let owners seek to convert their assets to cash.

Savills has reported that in July its Southampton office, which specialises in properties in the New Forest, along the Solent and in the Isle of Wight, had the best month in takings since the branch opened five years ago.

The firm's Truro office has sold four houses, each worth more than £1million, in less than a week. Lillicrap Chilcott, which specialises in waterside homes in Cornwall, clinched a sale almost every day last month. Holidaymakers have also spotted “For Sale” boards along cliff roads or in popular resorts such as St Ives, Cornwall, and Aldeburgh, Suffolk, where before-sales were conducted more discreetly.

Chris Wood, president-elect of the National Association of Estate Agents, who has an office in Helston, Cornwall, confirmed the trend. “We've had the best sales month for 12 months, and I have spoken to colleagues who sell properties on the coast in North Wales and there are similar anecdotes around the country.

“People are still keen to get their hands on individual properties in rural locations. These are houses of character which people wish to buy. Some are holiday homes, but not all. It is a tough market out there, but it is clear there are pockets of the UK where sales are holding up and are strong,” he said.

In the country's honeypot locations, the best houses rarely change hands. Even three to five years ago, if one came on to the market, the price might have been out of reach to most people. But with many second-home owners now deciding to sell up, an exodus of townspeople seeking a new lifestyle, and other people anxious to find an ideal home for retirement or holidays, the market is buoyant.

Many investors who bought holiday rental homes on a second mortgage are also selling up, to cut their overheads and avoid the hefty monthly repayments. Properties that are being sold because of a death, divorce or an elderly person going to live in care are also a feature of most agents' portfolios.

The main demand from potential buyers is for an iconic or unusual house in a village near a good school or at the seaside. There is little interest in standard terraced houses or 1930s semis on the fringes of holiday destinations. Agents also report a large number of cash buyers. Many are people who sold their main home 18 months ago, fearing an economic downturn, and who are fed up of renting and are now ready to make a shrewd acquisition.

Others selling up in London and the Home Counties have sufficient equity to buy homes outright. Some are switching their main residence from the capital to areas that offer a better quality of life.

Patrick May, of Strutt & Parker's Exeter office, said: “I think a number of people with second homes are selling up because they are not seeing a capital growth and the rental income is sporadic. Therefore, if there is no return on investment, people cannot justify having the property. I think the people keeping the market going are those who like a particular area and want to buy in, or people moving for business reasons.”

Michael Riley, of Savills Southampton, said: “People are taking advantage of lower prices in the market. Some are going to retire in three or five years' time and want to buy their new home now. There is also a trend for holidays in the UK and some think they may as well snap up a property in a place they already know and love to visit.”

He said that owners had to be realistic with prices. A thatched three-bedroom cottage in the New Forest was on the market at £450,000 last year but did not shift. Contracts have just been exchanged at a selling price of £360,000. This was a cash purchase by someone selling his main residence for £550,000.

“We're also seeing a lot of people who have been renting and they now want to get into their own home. They can afford properties which were beyond them three years ago,” he said.

Richard Copus, an estate agent in Newton Abbott, Devon, said: “There is a positive attitude, viewings have increased and offers are being made. Frankly, I think a lot of people are bored of hearing about the credit crunch and want to get on with their lives. People who sold to rent have suddenly decided to buy and take advantage of lower prices. They'd rather have their cash in a property than in the bank.”

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