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Second home ownership rises in Britain

Words: Laura Edgar
Second home ownership / iStock-497230721

The proportion of adults in Britain who own a second home increased by 30 per cent between 2000-2002 and 2012-2014, according to analysis published by think tank Resolution Foundation.

The analysis suggests there has been a 1.6 million rise to 5.2 million in adults who own multiple properties, which equates to one in 10 people.

This, combined with a fall in home ownership since the early 2000s, has underpinned the “increasing concentration in property wealth within a declining proportion of families”, said the think tank.

Gwynedd has most second homes in UK

An article in the Daily Post notes that Gwynedd is the UK’s second home capital, with more than a quarter of house sold as second homes at an average selling price of £289,182.

This is according to research by Hamptons International.

In an attempt to halt the increase in second home ownership, Gwynedd Council has voted to put a 50 per cent council tax hike on them in December, from 2018.

The research says that 40 per cent of adults have no property wealth, up from 25 per cent in 2000 to 2002.

The value of assets held by multiple homeowners has increased by 20 per cent in real terms between 2000 and 2002 and 2012 and 2014, from £125,000 to £150,000.

Those who own multiple homes are likely to have been born between 1946 and 1965, aged 52 to 71, and account for 52 per cent of all the wealth held in additional properties. Those born between 1966 and 1980, aged 37 to 51, account for 25 per cent of additional property wealth.

People born since 1981 own just 3 per cent of additional property assets, accounting for less of it that their predecessors did at the same age.

Other statistics from the research include:

  • 88 per cent of additional property owners are in the top half of the wealth distribution.
  • 79 per cent of adults who earn income from additional properties are in the top half of income distribution.
  • 59 per cent of such landlords are found in the South-West, the South-East, East of England and London.

Laura Gardiner, senior policy analyst at the Resolution Foundation, said: “Multiple property ownership is still a minority sport, but a growing one that represents a significant boost to the wealth pots of those lucky enough to own second homes. People with second homes not only have an investment that they can turn to in times of need, for instance, in later life when care is required, but if the property is rented out they also see a boost to their incomes here and now.”

She said that, contrary to popular narrative, these second homeowners are “rarely your typical middle-income worker shoring up savings or ordinary retiree boosting pension income”.

“With young people much less likely to own a home at all than their predecessors at the same age, the growing concentration of property wealth among fewer families raises concerns not just for their living standards but for wealth inequality of our country as a whole. Recent steps to increase stamp duty on second homes and reduce tax relief on buy-to-let mortgage are attempts to address this challenge, but policymakers should consider what more can be done to ensure that home ownership doesn’t become the preserve of the wealthy for generations to come.”

More information can be found on the Resolution Foundation website.

St Ives and second homes

In May 2016, The Planner reported that residents in St Ives voted to ban the building of second homes as part of its neighbourhood plan referendum.

The plan, voted in by 83 per cent of voters in St Ives, Carbis Bay, Lelant and Halsetown, features a proposal that new housing projects will only get planning permission if homes are reserved for full-time residents.

The aim of the proposal is to “safeguard the sustainability of the settlements in the St Ives Neighbourhood Development Plan area, whose communities are being eroded through the amount of properties that are not occupied on a permanent basis”.

The number of second homes in St Ives totalled 25 per cent in 2011, an increase of 67 per cent since 2001, according to the plan, while over this same period, housing stock in the plan area “grew by 962 or 16 per cent, but the resident population grew by only 270 or 2.4 per cent and the number of resident households grew by less than 6 per cent”.

In November 2016, the policy was subject to a legal challenge in the High Court.

Mr Justice Hickinbottom heard that the claimant, private developer RLT Built Environment Ltd, sought to challenge the making of the neighbourhood plan on the basis that there had been inadequate consideration of reasonable alternatives to the plan’s policies, contrary to the Strategic Environment Assessment (SEA) Directive.

The developer argued that increasing the amount of available market housing for local people to buy was a “reasonable alternative” to the proposal in the plan.

The High Court found the policy to be lawful, with Cornerstone Barristers arguing that that it seeks “not merely to make more housing available to local people but rather to reduce the proportion of second homes” in the town.

Image credit | iStock