Second Home Ownership (Regulation)

Part of the debate – in the House of Commons at 4:14 pm on 29th March 2010.

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Photo of Dan Rogerson Dan Rogerson Opposition Whip (Commons), Shadow Minister (Communities and Local Government) 4:14 pm, 29th March 2010

I beg to move,

That leave be given to bring in a Bill to give planning authorities the power to require change of use planning permission before existing or new homes can become second homes;
to require the Secretary of State to examine the options for using this power to limit the change of use of full-time homes to part-time occupation;
to allow local councils to levy business rates on second homes;
to provide for small business rate relief not to apply to second home owners;
and for connected purposes.

It has been my honour to represent the people of North Cornwall, and I have consistently raised the proliferation of second-home ownership and its effect on rural communities. The problem is not limited to my constituents, of course; it affects many rural areas throughout the country. My hon. Friend Tim Farron has referred to it, and Members on both sides of the House are aware of it.

As my constituency includes the long stretch of coastline running from Crantock up to Morwenstow, it has a huge tourist industry, and we welcome the many visitors who come every year to enjoy the coastal scenery, as well as those who travel inland to see our wonderful towns and village communities across Bodmin moor. That large influx of visitors supports the local economy and brings many new perspectives, but increasing numbers of them want to grab a piece of the area that they can keep, and keep returning to, by buying a second home.

In 2008, a parliamentary answer to my hon. Friend the Member for Westmorland and Lonsdale included figures for second-home ownership broken down by local authority area. At that time, about one in 10 homes in the area covered by the former North Cornwall district council was a second home, but the real figure, arrived at if properties that have incorrectly been registered as holiday lets are taken into account, is probably much higher. In some areas, however, second homes meet other demands. That is particularly the case in urban settings, so I am especially concerned about the situation in rural areas, where homes that were previously residential are taken into holiday use and are ultimately left empty for much of the year.

To find out why that is a problem, I encourage Members of all parties to come and talk to my constituents. They might want to stay in a hotel or at a campsite and enjoy the Cornish countryside, and thereby support the local tourist economy, but while they do so they might also discuss with local residents how this issue affects them. In many communities, it has inflated house prices, and the consequent decrease in the local population has led to declining school rolls and, ultimately, to the closure of small schools. It has also led to the closure of post offices because of declining business. It can pose challenges in the recruitment of retained firefighters, too, as those who protect their area by providing such crucial services are forced to move away from the communities where their families have historically lived-to move further inland, perhaps, or into the towns.

High house prices force local people out. Sometimes they are forced out of Cornwall entirely, or at least to areas further from the coast. They are often forced to travel further to work, therefore, and they are also forced on to the affordable housing waiting list-but, in common with other parts of the country, we already have a long waiting list.

The Government have often sought to turn this issue into one that is purely about the need to build new affordable housing. That is a crucial issue, and I support the aim. My party has long supported community land trusts, and we now have them functioning in Cornwall. We have also supported many other ways of adding to the supply of affordable housing. The second home problem is a separate issue, however, and it is getting worse.

Some have said to me that fewer people are investing in second homes in the current economic climate. Unfortunately, however, that is not the case. In an article recently posted on the propertycommunity.com website, Mr. Liam Bailey, head of residential research at Knight Frank, said that complaints from locals in second-home hot spots had been a long-standing issue and that the "uplift" in local pricing "can be dramatic." He gave examples, saying that prices in one community in Cornwall were 131 per cent. higher than the local average. He also highlighted communities such as Rock and Trebetherick in my constituency and Bamburgh in Northumberland, where, he said, there were

"second home price uplifts of between 90 per cent. and 100 per cent."

The article also states:

"The number of second homes in England rose by 2.6 per cent. in 2009".

It added that that followed a small

"fall of 0.4 per cent. in 2008" and that this

"rise, which equated to 6,212 additional second homes, pushed the total to an all time record of 245,384".

Mr. Bailey further believes that that growth in demand will continue:

"Early indications this year suggest that supply in the main second home hotspots is still 20 per cent. below the long term average."

So the pressure on prices will remain. It was reported this month in the Western Morning News that another estate agent, Savills, has said that the revival of big City bonuses and poor returns from other investments were continuing to drive the trend, that 43 per cent. of prime stock bought in Cornwall over the past four years was for use as a second home and that prices in Cornwall were just 8.5 per cent. off their highest watermark in 2007.

We face a particular problem in North Cornwall, where the increase in house prices from 1999 to 2009 was 230 per cent., which compares with an average increase in rural Great Britain of 118 per cent. over that period, so the problem is continuing to get worse. Some people have said that that means that a lot of those properties will always be out of the reach of local people. Although that may be true, those properties fall within a housing a market and any influence at the top of a local area's housing market has a knock-on effect all the way down the chain, hauling up prices and making properties more unaffordable.

What can we do about this problem? The use of taxation is an option that has been suggested, but I am concerned about the basis on which some sort of punitive tax regime could be introduced. Use classes orders, such as those proposed in the Bill, have been proposed consistently by my party over a number of years as a means to tackle this problem. We are not the only ones to have done so; Mr. Llwyd has proposed a similar change.

I referred to this matter in my maiden speech in 2005. I was thus delighted to give evidence to Elinor Goodman's Affordable Rural Housing Commission and to read its report when it was issued in May 2006. The report recommended using the planning system to deal with second home proliferation. The Government picked up on a number of the report's conclusions and although they moved to action those, they ran away from tackling the issue of second homes.

In 2008, I served on the Public Bill Committee considering what became the Planning Act 2008 and tabled an amendment that would have allowed local authorities to suggest that the Secretary of State employ use classes orders, which were needed to tackle local problems. That may have had relevance in other areas, because the Department has picked up on the issue of studentification and has come back with possible change of use requirements in respect of houses in multiple occupation. The Department has looked at that approach, but just not in respect of second homes.

More recently, my hon. Friend Matthew Taylor was invited by the Prime Minister to undertake an inquiry on the state of the rural economy. My hon. Friend took evidence from a wide cross-section of people and organisations, and produced an excellent and well-evidenced report, "Living Working Countryside", which was published in July 2008. Yet again, the Government agreed to act on a number of key recommendations but, lo and behold, they refused to tackle the second home issue. My hon. Friend's report had again proposed that the planning system ought to be used as a means of tackling it, and he suggested piloting such an approach in the national parks. The Government response was cruelly dismissive towards people in local communities, stating that the Government were

"not persuaded that the 'problem', such as it is, could be tackled effectively through the planning system."

In other words, the Government were not persuaded that the planning system was a route by which the problem could be tackled, despite having said that it was possibly a route by which other issues, such as studentification, could be addressed.

I and other hon. Members have repeatedly raised this issue, which is crucial to local communities such as those in North Cornwall. We need action to be taken to resolve the problem, and it seems to me, as it has seemed to those who have undertaken detailed study of it, that the planning system is the way that the problem could be solved. The Government could at least take that on board and explore ways in which such an approach could be applied. I hope that the Bill, if it progresses, will make a contribution towards tackling this problem, which is crucial to rural communities around the country.

Question put and agreed to.

Ordered,

That Dan Rogerson, Julia Goldsworthy, Andrew George, Mr. David Heath, Mr. Elfyn Llwyd and Mr. David Drew present the Bill.

Dan Rogerson accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 23 April, and to be printed (Bill 98).

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