Take me to the Riviera

Will cheap new homes in glitzy St Tropez damage the area's cachet? Graham Norwood finds out

Think of St Tropez and you think of sea, sand, celebrities and multi-million pound villas. Wander past a restaurant and you'll see the likes of Joan Collins and Michael Flatley, so many properties will be über-expensive. That third-floor, three-bed apartment in a restored building along the harbour edge doesn't come cheap - it has a £1.8m price tag. And a private villa on a nearby hill with panoramic sea views and pool is selling for £3.8m.

Think of St Tropez and you think of sea, sand, celebrities and multi-million pound villas. Wander past a restaurant and you'll see the likes of Joan Collins and Michael Flatley, so many properties will be über-expensive. That third-floor, three-bed apartment in a restored building along the harbour edge doesn't come cheap - it has a £1.8m price tag. And a private villa on a nearby hill with panoramic sea views and pool is selling for £3.8m.

But a more modest budget of around £200,000 will get you a good home within a few miles of the town that became "St Trop" in the 1950s when Picasso and Brigitte Bardot first visited, partied and bought homes there.

Typical of this new breed of small second homes is a development 16km from St Tropez called Le Clos des Vignes by MGM (020-7494 0706), one of France's largest builders. The 55 properties in phase one sold quickly last year, mainly to Britons; now 45 homes in phase two are on sale. They include two-bedroom apartments from £125,000 and three-bedroom houses with two bathrooms from £240,000. "Our aim is to create new homes which within a few years will look as if they belong, rather than standing out," explains MGM spokesman James Rodwell.

These homes are in La Mole, which until recently was a centre for the production of cork for wine bottles and fishing net floats. It is also home to Auberge de la Mole, a restaurant frequented by Diana Princess of Wales when she holidayed in St Tropez.

Just across the bay at Sainte Maxine, MGM is building 50 apartments and seven townhouses in a wooded development called Domaine des Pins Bleu. A three-bedroom, two-bathroom apartment with a large sun terrace will cost around £245,000, with townhouses starting at £255,000.

Estate agents are aware that new homes of this kind do not fit with the traditional image of St Tropez, so they emphasise convenience rather than nostalgia.

"While many love the idea of finding an old rural property to do up, the reality is that buying a modern home that has been designed to look as if it is a natural extension to an established village makes good financial sense," says Rodwell. "French notary fees and stamp duty on a new home add only 2.5 per cent to the purchase price compared with up to 7 per cent for an older property."

A little more expensive, but still well within the grasp of many British second-home buyers, is Golf Country Club de Gassin, in the hills over St Tropez. Sixty villas and 73 town houses are being completed around a course designed by former champion Gary Player. Prices start from around £430,000 (Knight Frank, 020-7629 8171).

Like Le Clos and Domaine des Pins, a new-build golf development is an innovation for St Tropez. "They're not typically French homes as most Britons imagine them," says Hugo Skillington, an Englishman who has run estate agency offices in St Tropez and Grimaud for almost 35 years.

"But that's the point - they allow you to sit on the terrace next to your pool watching the yachts in St Tropez harbour. That beats combating damp or replacing the roof or the other things you must do to an older property," he claims.

Cubby Wolf, another British ex-pat in St Tropez, runs Riviera Realty, a buying agency helping outsiders locate homes. "Most homes I sell or buy here are £2m or more so in context Gassin seems good," he says.

So why has one of the world's most legendary resorts been identified as a location for relatively cheap housing?

Just as in the UK, planners in French councils want to use redundant land for new homes to house the country's growing population and burgeoning numbers of second-home buyers.

As a result, ugly former industrial sites are up for development with incentives and tax breaks for builders. For example, Le Clos des Vignes is built on a former vineyard left derelict for 10 years; Golf du Gassin has been constructed over a disused quarry.

But a growing population and cheaper housing does mean compromises are necessary, especially for transport. Celebrities can use small jets or helicopters to fly into tiny private airports along the coast, but those wanting a £200,000 bolthole will have to suffer an arduous drive of more than 90 minutes from Nice airport, which EasyJet and BA serve up to three times daily.

In St Tropez and nearby coastal areas, traffic jams are now commonplace and many feel congestion problems are damaging the beauty and relaxating atmosphere of the area.

Even so, St Tropez retains a certain cachet - despite Mauritius, Barbados, Tuscany and the like offering rival hotspots for celebrity wannabees. But much of St Trop's appeal until now has been because it has been unaffordable for most of us.

Whether it will stay that way if cheaper properties proliferate is another question.