A significant shift is happening in the world of property ownership. From the empty streets of North Devon during the first Covid-19 lockdown to the surging house prices on Devon’s north coast, the impact of second home ownership is being felt by local communities. As the government and local councils begin to tighten the reins with new tax measures and potential planning amendments, owners of second homes and holiday lets are facing a new reality.

The Rising Concern Over Second Homes

Selaine Saxby, the Conservative MP for North Devon, highlighted the emptiness of her village during lockdown, attributing it to the prevalence of second homes. This situation underscored a broader issue across many of the nation’s beauty spots, where properties often remain vacant, leaving locals with fewer housing options. The subsequent influx of city dwellers seeking a countryside retreat and the boom in staycations have only exacerbated the situation, with towns like Ilfracombe experiencing a staggering 52% increase in house prices since 2021, alongside a 67% drop in long-term rentals available to locals.

Government and Council Actions

In response to concerns raised by MPs like Saxby, Chancellor Jeremy Hunt announced in his spring budget higher taxes on holiday lets and lower taxes on sales of second homes, aiming to encourage owners to sell their properties. Despite these measures, no English council has yet followed Wales in increasing council tax on second homes. However, Gwynedd council in Wales is taking a pioneering step by considering amendments that would require homeowners to register properties as either a main home, second home, or holiday let, granting the council power to control the status change of properties.

Craig ab Iago of Gwynedd council expressed concerns over the affordability of housing for locals and the impact of unchecked second home ownership and holiday lets. In response, Gwynedd applied a 150% council tax surcharge on second homes, leading to a notable delisting of such properties. Yet, the full effect of these measures remains under observation.

The National Debate and Potential Solutions

The issue has sparked a national debate, with Labour’s shadow housing minister, Matthew Pennycook, suggesting that local authorities in England could be given powers to introduce licensing regimes for second homes and short-term lets. Meanwhile, Michael Gove, the Secretary of State for Levelling Up, Housing and Communities, has proposed a register for short-term holiday lets and a plan to allow landlords to convert rented properties into holiday accommodation without planning permission, though this has been met with criticism for potentially undermining planning reforms.

Real-World Impacts and Future Prospects

The combined pressure of increased taxes and regulatory changes is already showing real-world effects in areas like Gwynedd, where long-standing second home owners are considering selling their properties. Estate agents in the area report a cautious approach among sellers to avoid flooding the market, with the full impact of the new measures expected to unfold over the coming year.

In Devon, similar issues persist, with MP Selaine Saxby aiming for a balance between holiday lets, second homes, and long-term rental properties to address the housing needs of local families.

As the UK grapples with the challenges of second home ownership, the actions taken by the government and local councils signify a turning point. While the intended goal is to make housing more accessible for locals, the effects on second home owners, the property market, and community dynamics are complex and evolving. The balance between preserving the charm and economic benefits of tourist influxes while ensuring affordable housing for locals remains a delicate endeavor.