Cream Of The Country: Lyme Regis

Lyme Regis is Dorset's most westerly seaside town. Its tangle of hilly streets tumbles down to a picturesque harbour which is flanked by miles of golden, sandy beaches. The area is of such geological importance - its craggy cliffs are festooned with fossils - that it was recently granted World Heritage Site status.

The town's principal landmark is its sheltered harbour whose vast man-made breakwater, the Cobb, has protected it from fierce, south-westerly gales since medieval times. It also enabled Lyme to become a leading port and shipbuilding centre.

When this industry declined, the town went on to enjoy a new lease of life in the 18th century as a fashionable seaside resort. It became particularly popular among artists. Turner and Whistler both painted at Lyme, while Jane Austen spent a holiday here in 1802 and subsequently wrote about it in Persuasion and Northanger Abbey.

John Fowles later used the town as the backdrop for his novel The French Lieutenant's Woman. It is easy to see why Lyme's popularity as a seaside resort has continued ever since. Apart from its fine bathing and breathtaking cliff-top walks, the town offers plenty of other pleasant distractions.

There is a good selection of pubs, restaurants and wine bars in and around Broad Street, where there are also plenty of craft stores and antique shops. The more energetic can choose from any number of water sports or hire boats in the harbour to go deep-sea fishing.

However, in spite of its enduring popularity as a holiday resort, the town has remained remarkably unspoilt architecturally. There are few modern developments and an incredible selection of stunning period properties. "It's a real joy to work here," says estate agent Richard Pittendrigh, of local firm Martin Diplock. "No two houses on our books are ever the same." The most sought-after properties in Lyme tend to be concentrated to the east of the harbour, along the steep narrow streets of the old town that wind around the banks of the River Lym.

To the west, beyond Broad Street and along the town's pedestrianised sea-front, are to be found some lovely Georgian, Regency and Victorian houses and flats overlooking the Cobb and the sandy expanses of Monmouth Beach beyond. None of these is cheap and one can typically expect to pay up to 30 per cent more than in many other towns just a few miles away, such as Seaton, Axminster or Bridport. Similar premiums also apply to properties in nearby coastal villages such as Charmouth to the east and Rousdon to the west.

Local agents explain these high prices as due to the number of second-home owners. "I would say that as many as 60 per cent of my buyers are people from London or the Home Counties looking for holiday homes, either for themselves or as buy-to-let," says Paul Oldershaw, of local firm Palmer Snell.

Most of these people are looking for smaller properties and there are plenty of these to be found around the town. However, there aren't many larger ones. "It is very tight for space in Lyme," says Oldershaw.

The local property market has increasingly come to resemble the London one. Both have followed a similar pattern in recent years - a strong period of growth followed by a slight levelling out about nine months ago. However, whereas house prices in London are now showing signs of rallying, those in Lyme are slightly lagging behind, providing a window of opportunity for prospective buyers.

Fact box

Cost of living: one-bed flats from £110,000; two-bed flats in old town from £150,000; three-bed period stone cottages from £300,000; four-bed detached houses from £400,000; five- to six-bed farmhouses or converted barns with substantial grounds in picturesque outlying villages from £500,000.

Attractions: excellent local swimming, sailing, wind-surfing and deep-sea fishing; cliff-top golf-course; cycling and pony trekking; good selection of local primary and secondary schools.

Downsides: limited shopping facilities; tricky parking around the old town; too many tourists visiting during the busy summer months.

How to get there: regular trains from Axminster, six miles away, to London Waterloo take approximately 160 minutes.