A seaside town is shedding its shabby image to become the next property hotspot.

Hastings has been named as one of the best places to buy property in Britain in 2006 by Country Life magazine.

The boom is being driven by City banks such as Goldman Sachs, Morgan Stanley and Lehman Brothers, which are paying bonuses of more than £1 million to 3,000 bankers and brokers.

Traders are said to already be selling their multi-million pound London properties and looking to buy bigger homes in the country and on the coast.

More and more City executives are working from home using the internet, adding to the demand for homes outside the capital.

Juliette Gordon, director of J K Gordon's estate agency in George Street, Hastings, said: "We have had a massive boost in business in November and December when the property market is usually dead.

"We have still got to catch up with Eastbourne and Rye but parts of the Old Town are quite exclusive now."

Marc Hevllin, branch manager at the John Bray & Sons estate agency in the High Street, said the multi-million pound regeneration of Hastings, including a new university, had been driving demand for homes.

He said: "Prices aren't rising yet. They're steady, but there seems to be a very strong underlying interest in Hastings.

"There is a great deal of demand for period properties in the Old Town and limited supply.

"There are people coming down from London to work from home in Hastings because the internet has made it possible. They don't have to worry too much about the commute time into London.

"As a Hastings resident for more than 30 years, I can say there has been a noticeable decline in the amount of crime as well."

He said it was possible to buy an attractive, well-fitted period cottage in Hastings Old Town for £200,000 and that a seafront flat with two bedrooms could sell for £120,000.

The price of an average home in Hastings has risen from £44,902 in 1994 to almost £160,000 today.

According to Country Life, Kensington, Chelsea and Pimlico in London will be the areas with the highest demand for housing in 2006, followed by Salisbury in Wiltshire and Ramsgate in Kent. Hastings is in sixth place.

The town's reversal of fortune has been noted by Tynemouth MP Alan Campbell, who is calling for Tyneside Council to adopt Hastings Borough Council's Grotbuster scheme in Whitley, a seaside town in the North East.

People who own decrepit buildings have been forced to make improvements or face action, leading to more than 230 buildings in Hastings being tidied up.

Mr Campbell said the idea was "refreshing, sensible and precisely what was needed in Whitley".

Friday, January , 2006