One of the first acts of the new British government was to try to bring about a rebalancing in the housing market. While one move wasn’t exactly well received – the bringing down of the stamp duty brackets – presenting the chance for councils to increase the tax on second homes was welcomed by many.
Not only could doubling the council tax on second homes bring more cash to the coffers of councils to use on important infrastructure projects, but it could also encourage a sales rush. In fact, in an attempt to get out before the new rules came in, there was a holiday home sell-off that saw the number of listings in places like Norwich and Torquay jump by 40 per cent. In further evidence of this, one-third of new listings were without a chain.
Many councils have leapt at the opportunity to increase taxes on second homes, and if the sales keep on coming, it could mean a boost for local retail in holiday home hotspots.
Second homes hit the market
Plenty of second homes hit the open market before and after the new council tax rules came into play. This was most noticeable across the country’s most popular areas for second homes and holiday homes. Wales has long been a popular place for second homes, but after Pembrokeshire upped its tax by 200 per cent hit the market, over 100 second homes hit the open market.
The Welsh market is different from the English, in this case, with 300 per cent being the top premium allowed, but when you see stats like 30 per cent of Newport being second homes, it’s clear that something needed to be done. This is particularly the case with the Welsh government trying to find ways to help local people afford local homes. There is some extra good to come from this, like Devon and Cornwall police set to get a £6 million boost.
Still, for some, it’s been difficult to move the second home in the current market. Selling homes that have been unoccupied for a while can be difficult on the open market, but an alternative option for a quick can be online. Helping many second homeowners to sell their houses quickly, cash house buyers guarantee a free and fast cash offer and the ability for sellers to sell on their own terms. So, there is a way to sidestep the tax increases.
Bringing life back to ghost towns
There’s a very complex argument as to the weighted benefits of people flocking to second homes during peak tourist seasons to create a rush for local businesses against having more permanent residents. Local economies certainly benefit from the influx of tourists and people during the warmer months, but the drops in the offseason don’t help the year-round sustainability of local retail.
In fact, some report the prevalence of second homes being so great in some places that, during the off-season, they become ghost towns. Without permanent residents around, local businesses struggle to get by month-to-month. There’s an additional factor to weigh in, which is the availability of affordable housing, but having more properties available for local people will eventually bring prices to a level that more locals can afford.
The approach of sending up council taxes on second homes around the UK has had the intended effect. What councils would ideally see next is permanent residents moving in and fuelling local retail more than the oft-absent former owners did.
