BBC’s analysis of council figures has revealed that the number of holiday lets in England has risen by 40% over the past three years. The rise, caused predominantly by the surge of second home ownership during the pandemic, saw tourist areas including North Devon, the Cotswolds, Norfolk and Scarborough registering sharp increases. The overall number of holiday lets, taken from data provided by 152 councils, stood at 27,424 last year – compared to just 19,543 in 2018.
In popular local communities there are concerns that second homeownership is causing inflated property prices which are forcing established residents out of the area and pushing properties out of their affordability. Several communities are now taking steps to combat this, with the Yorkshire seaside town of Whitby recently voting to limit the sale of second homes. In the vote, 93% of the town’s residents voted to restrict the sale of new-build and additional housing to full-time residents. 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.
Whitby became 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 bid 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:
“I think if local communities limit the sale of second homes, it has the potential to create an even more fractured market in these locations. By doing this, it will decrease the supply, however I believe the demand will remain high – causing the value of 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.”