It was announced last week that the Yorkshire seaside town of Whitby has voted for a limit on the sale of second homes. On Monday, 93% of the town’s residents voted to restrict the sale of new-build and additional housing to full-time residents in a poll. It is estimated that 28% of properties in Whitby are second homes, with the demand raising average house prices in the town by 17% last year – the second highest house price increase of any costal resort.
Data from Rightmove shows the average house price in Whitby to be £254,218, a stark contrast to the average salary in the town of £18,900, with the influx of second home purchasers pushing properties out of affordability for many local residents. Whitby becomes the latest tourism hotspot to limit sales of new builds to full-time residents, joining Fowey, St Ives and Mevagissey who previously voted on the restriction. Communities hope that by restricting the sale of second homes, properties will become more affordable for local residents and help to grow local small businesses within the area. In the county of Cornwall, 80% of properties in some villages are second homes, causing campaigners to hold monthly marches in a bit to stem the flow.
The Department for Levelling Up, Housing and Communities produced a fact sheet where it estimated that 495,000 properties in the UK were second homes. The Government stated that whilst it ‘recognises the benefits that second homes and short-term holiday lettings can bring to local economies’, they also see the ‘adverse effect that large numbers of second homes can have on some areas’. The Government introduced a 3% higher rate of Stamp Duty Land Tax (SDLT) for those purchasing additional properties in a move to limit the number, but it remains to be seen whether communities will take matters into their own hands by following in the footsteps of Whitby to restrict the sale of second homes.
David Hannah, Group Chairman at Cornerstone Tax discusses second homes in the UK:
“Whilst I understand this measure taken by Whitby and other communities around the UK, I think it has the potential to create an even more fractured market in these locations. By limiting the sale of second homes, it will decrease the supply, however I believe the demand will remain high – causing the value of second homes to increase even more.
“I do think there are other potential solutions rather than simply limiting the market in this way. Perhaps a better idea might be to allow local communities a window of time when a home is initially listed, before it becomes available to any potential buyer.”
