Obviously the much wider problem is that of artificially inflating house prices, second home buyers increase demand which increases the price. So the fashionable weekend retreats such as Rock, Fowey, Helford, Mousehole start to have higher and higher house prices. As a consequence local people that want to live in these places become less and less able too, combined with the decay brought on by empty non-residential properties, there are less jobs as well. Without being able to earn a living there or afford a house they then move somewhere else. This has been evident in Cornwall through the last decade or so, whereby house prices in inland (less desirable to moneyed urbanites) have started to increase with the demand from people displaced from the 'rural idylls'. In effect the problem like a virus has spread, started in coastal and rural communities now encompassing Cornwall. Take for example my street in Penzance (St James street), small houses (mostly 2 bedroom) built around 1900, no parking, no gardens, hardly prime properties by anyone's standard. According to the website www.email4property.co.uk the average sale price on this street in 2000 was £57,000, 2001: £66,161, 2002: £77,322, 2003: £116,500, 2004: £119,400, 2005: £152,475, 2006: £142,750, 2007: £149,250, 2008: £164,000, 2009: £143,916, 2010 £141,600. So to buy my house in 2000 was £57,000 now £141,600 (link to the page), more than double what it was ten years ago, yet wages have not doubled and it is impossible to comprehend these rises without looking at factors such as second homes. Even with the recent recession and fall in employment and stagnation in wages, house prices have not significantly dropped. The demand has increased largely due to second homes, estimates on the number of second homes in Cornwall vary between 6% and 10%, Cornwall Council figures suggest there are 14,000 second homes in Cornwall. Compared to the number of people on housing registers in Cornwall 18,000 we start to uncover why we have such a housing problem in Cornwall.
So what can we do about 2nd homes in Cornwall?
Abolish second home discounts:
Cornish councillors recently unanimously backed a motion to abolish the council tax discount for second homes, currently they pay 90%. Not that long ago it was 50%, based on the idea that the house used less services as vacant, partly true but I am sure nobody would want their house being burgled or burning down and half or 90% of the usual police force or fire brigade turning up. I think the idea is that the council will make more money from these properties and will serve as a deterrent to second home buyers. Although I doubt it will, if you have say between three hundred thousand pounds and 2 million to spend on a house used occasionally, then a couple hundred quid a month would be like a drop of water in the Atlantic.
Stop second home owners pretending to run their houses as a business:
At the end of the last Labour government, they did float the idea of tightening up the rules of what constituted a business and presumably dropped it after middle England read about it. At the moment you can in effect pretend that a 2nd home is a business, taking advantage of various rate relief schemes designed to help bed and breakfasts etc. So you could buy a nice house in Polzeath rent it out once or twice to friends, then purport to be a loss making business and in effect get the taxpayer to subsidise your weekend retreat. I think this should be tightened up upon, I do think it's fair that genuine businesses can claim rate relief if they run at a loss and/ or to encourage them to invest in assets. As with everything tax, a decent accountant can find a workaround, so solving the problem would be difficult and ultimately this is just a nice sideline and wouldn't stop the ultra-rich buying a second home.
Ban new second homes when 5% of that area is already non-residential
This idea comes from Dick Cole, leader of Mebyon Kernow in his own words:
We need far-reaching reforms to the planning system and the introduction of controls to reverse both the spread and number of second homes. Planning permission should be needed before homes can be turned into part-time residences, so that councillors have the ability to say no.http://mebyonkernow.blogspot.com/2011/07/action-on-second-homes.html
Mebyon Kernow believes that if more than 5% of the housing stock in a particular settlement and/or parish are second homes, there should also be an automatic ban on any new ones. And in such areas, properties used as second homes coming onto the market should only be allowed to be sold for use as permanent dwellings.
I think this is a good idea, for too long councils in Cornwall have stood idly by whilst second homes have multiplied in our communities. They need to start representing the people of Cornwall better, there is very little appetite here in Cornwall for second homes, democratically Cornwall Council should reflect this and take action.
Change in attitudes:
Above are listed many reasons why outsiders but holiday homes in Kernow, but the problem is not just of outsiders. Keen for money, many Cornish people have sold their houses in the knowledge that it will go to a second home owner. So too Cornish estate agents are more than willing to encourage 2nd home ownership, what's the point of selling to a local family on minimum wage when a lot of money can be made from rich up country folk? I do not think either position is socially responsible, I understand the desire for money (I'd own my own house if I was rich) but at what cost is this profiteering to the people of Cornwall?
The reason I was spurned to write this blogpost today was after reading an article in the Independent link here, which really surprised me. I naively though that this left wing paper would champion social responsibility and the plight of the common man. But no true to the form of many champagne socialists they have written a long piece on the virtue of holiday home ownership in Cornwall, the benefits of the 'riveria' retreat and the investment opportunities etc. These are also attitudes that need confronting, it is quite common for lot's of London newspapers to market Cornish homes as if they were stocks and share or permanent hotel rooms with no though to the consequence to the people that actually live here.
Both internally and externally we need to change attitudes to second home ownership, both to bolster support for abolition of the council tax discount and introducing change of use in the planning system. But also to encourage people not to do it, to show outsiders that we have lots of lovely hotels in Cornwall and there are alternatives to buying a large house for occasional use. To convince house sellers that it is better for Cornwall, the Cornish economy and communities to not sell to people who want second homes. To convince estate agents that selling to local who needs a house is better for our economy and as a consequence the property business. I think we could introduce a bold policy decisions to second homes, Cornwall Council could in theory issue compulsory purchase orders for second homes and effectively turf people out. But I do not think this would be a good thing to do, I do not believe that the state should have these sort of powers, so we must concentrate on persuasion.
I am convinced that second homes are definitely a bad thing, I think there are legislative solutions to ease the problems which are already being proposed, but I am not sure this is enough. What we need is a change in attitudes , I am not sure how we can do this? any suggestions leave them below....