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Let’s hope second home ban doesn’t backfire

Locals vote through second home ban for new-build properties

The people of Whitby took matters into their own hands recently when they voted to ban non-residents from buying new-build properties as second homes and holiday lets.

Residents decided enough was enough and voted 2,111 to 157 in favour of restricting all new-build and additional housing to those that live there as their primary residence.

The result is not legally binding, but locals will use it to lobby Scarborough Council to grant new planning developments on such a basis only.

I think we can all sympathise with the plight of locals in such areas – especially first-time buyers – who want to live in the area where they born and bred but find themselves priced out of the market.

Property prices in Whitby rose 17% last year, according to Rightmove, taking the average house price from £217,620 in 2020 to £254,218 in 2021. Of course, city dwellers escaping to the country during Covid has not helped the cause.

An unsustainable demographic for local businesses populace

The large uptake of holiday homes in coastal tourist hotspots is not only damaging to aspiring homeowners but can have huge repercussions for local firms who find their businesses are unsustainable out of holiday season or are unable to find staff due to the high cost of living in the area.

One councillor in Whitby was quoted as saying the street in which he lives is comprised of 85% holiday lets and also that one recent development which consisted of twenty new builds had just one that wasn’t sold as a holiday let.

But will Whitby residents’ masterplan work? Unsurprisingly, Whitby is not the first coastal town to come up with it. In 2016, the residents of St Ives in Cornwall voted to ban the sale of new-build flats and houses to non-residents.

The local authority in Northumberland is also implementing similar restrictions in areas where over 20% of the local housing is comprised of second homes.

There is an element of being careful what you wish for however. Even with the best intentions, such policies are at risk of backfiring.

Could the ban hinder rather than help future affordable housing in the area?

A study by the London School of Economics in 2019 suggested the ban on selling new-build homes in St Ives had actually had a detrimental effect on local construction and tourism and led to properties becoming even less affordable for local residents.

It highlighted that without second homeowners being able to compete for new-build properties, they were limited to existing homes in the area, which further intensified the war between locals and outsiders and ultimately pushed up prices even more.

When it came to the construction of new-build properties, the ruling was also reported to have been detrimental to new affordable housing schemes.

A local construction firm in St Ives reportedly pulled out of buying a site which was due to comprise of 34 new properties – 14 of which had been earmarked as affordable homes.

The policy it said made the scheme financially unviable because the non-affordable homes could no longer command a premium and subsidise the affordable ones – meaning locals missed out.

The report suggested a better option would be a local annual tax on the value of a second home which would go to the local authority and generate revenue for the local community.

Is the solution more housing regulations?

Another option that has been touted, is for the need for planning permission in order to change a property into a second home or holiday let – something that would give local authorities more say over how many second homes are granted.

In a desperate bid to keep their communities thriving, the residents of Whitby were perhaps left with no other option. Previous schemes would however suggest a blanket ban on new-build second homes is not what is needed.

As the UK’s staycation industry continues to flourish and demand for holiday lets continues to rise, addressing the detrimental effect this has on local residents perhaps needs to be addressed with more urgency and purpose.

Simon Jackson is chief executive officer of MSS  

First published by The Intermediary 

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