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Second Home Ownership: Cumbria

Part of the debate – in Westminster Hall at 11:00 am on 19th December 2018.

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Photo of Tim Farron Tim Farron Liberal Democrat Spokesperson (Environment, Food and Rural Affairs) 11:00 am, 19th December 2018

I beg to move,

That this House
has considered second home ownership in Cumbria.

It is a pleasure and an honour to serve under your chairmanship, Dame Cheryl.

My constituency is an awesome place, with the Lake district, the Yorkshire dales, the Arnside and Silverdale area of outstanding natural beauty, the Cartmel peninsula and the rolling hills of south Westmorland alongside the stunning old grey town of Kendal. It may come as a surprise to some that we are Britain’s most popular visitor destination outside London, but it comes as no surprise to us; we know we are awesome, and we are delighted that over 40 million people a year visit us because they agree. Some 60,000 people work in Cumbria’s tourism industry, an industry that is worth £3 billion a year to the economy, and last year the Lake district was granted UNESCO world heritage site status, which has already seen a further increase in visitor numbers to our area in the year just passed.

We are proud to be a place of welcome and a place of warmth and generosity. However your Cumbrian journey begins, however you chose to stay with us, we are glad you are with us, and that includes folks who have a second home. However, this debate is an opportunity to face up to some facts: while we want to extend nothing but kindness and acceptance to all, including those who have a second home in Cumbria, I cannot ignore the fact that the rights of those who can barely afford a first home are being eroded by excessive and increasing second home ownership in so many of our communities.

I will start by clarifying what we mean by the term “second home”. When we use that term, we do not mean holiday lets, which are a significant part of the all-year-round tourism economy. A second home is a property owned by someone whose main home is elsewhere and who lives in that second home pretty rarely, maybe for a few weeks or weekends a year. There is no getting away from the fact that high numbers of second homes rob communities of a permanent population and the consequent demand for local services. They rob those communities of life and vitality, and they can rob them of the resources they need to be sustainable.

Second home ownership also contributes to pushing up house prices beyond what is affordable for most local families. There are 3,819 registered second homes in South Lakeland, but that is unlikely to be even half the picture. Given that second home owners, thankfully, no longer benefit from a council tax discount, they no longer have a financial incentive to register their property as a second home. It is assumed, then, that the majority of owners now simply do not register at all, and 3,819 is therefore likely to be a colossal underestimate. Anecdotal evidence suggests that second home ownership has risen significantly since the time when there was an incentive to register, from 7,000 properties in South Lakeland in 2006 to a likely figure of around 10,000 second homes or absentee-owned properties today.

Ten thousand homes. That is 10,000 homes that do not have a permanent occupant, 10,000 homes not sending children to the local school and 10,000 homes not providing weekly demand for the post office, bus service, pub, church or village store. When second home ownership gets to a critical level, the absence of a permanent population begins to have tangible consequences. Schools in places such as Satterthwaite, Lowick and Heversham have closed because there was not a year-round population big enough to sustain them. Several of my schools today have fewer than 30 pupils. They are brilliant schools, but every time a house in the village is sold to a second home owner, they see their future becoming a little bleaker.

Bus services have been pared back out of season in the Lakes and the Cartmel peninsula for the very same reasons. The village store in Backbarrow closed 18 months ago and awaits a new buyer as the number of full-time residents in that village continues to dwindle. With not enough kids going to local schools, not enough people visiting the local shops and not enough people using the local bus service, it all means that those services end up becoming non-viable and that beautiful places can become empty places, with communities struggling to survive.

Over the weekend, I visited a small hamlet in the Lakes—I will not name it—where there are a dozen houses, precisely half of which are second homes. All the residents of the remaining six properties are pensioners and, as it happens, are under serious threat from their private landlord, who is contemplating evicting them to sell the houses as holiday homes. I am dealing with that matter separately, but even as things stand, each of those residents fears being the last one left as their community dwindles away. A few weeks previously, I met an older gentleman in the Rusland valley who exemplified their fears. He was the last permanent resident of his small hamlet. The only people he ever saw were the people who came and went, renting the homes in his neighbourhood; I would not exactly call them neighbours. He was isolated and, frankly, deeply unhappy.

Last week I made an early-morning visit to the Troutbeck Bridge Royal Mail sorting office, to thank the team for their immense work in the run-up to Christmas. While I was there, the manager of the sorting office told me of an older lady who had been found by the postie, 18 hours after she had had a fall. The settlement near Ambleside where she lived was almost entirely second homes and she was the only full-time resident. She no longer had any neighbours, and in this extreme case that could have cost her her life.

The Government have talked a lot in recent times about loneliness. It is something we are all the more conscious of as a society as Christmas approaches, when the absence of community and family are felt so acutely. Despite their loneliness agenda, the Government have so far done nothing to address the fact that second home ownership is leaving vulnerable people in the shells of once-thriving communities. Those are homes that should be lived in, not just maintained.

The problem affects larger communities too; I could list countless other examples in communities such as Hawkshead, Coniston, Grasmere and Dent, each with around 50% of its properties not lived in all year round. Then we have Elterwater, with a staggering 85% of its properties owned by those who are absent for most of the year. Hon. Members will be unsurprised to hear that Elterwater’s post office closed a few years ago.

It is no surprise that the loss of vital services so often follows the loss of a permanent population. To put it bluntly, excessive second home ownership kills villages. We are a resilient and proud people in Cumbria, working hard to make our own luck. I think of the community-run shop in Witherslack, the community-run post office in Storth and the affordable housing groups in Coniston and Grasmere—all proof that local people are determined to fight against the tide and keep our communities alive and thriving. It feels to me that this is another of those issues that the Government overlook because they have taken their eye off the ball, trapped in the dark forest of Brexit and incapable of focusing on the day-to-day challenges that our country faces.

I am determined to give our communities the best chance to defeat the threat of second home ownership and I am here to tell the Minister that this is a problem that can be solved. The good news is that there is a clear set of actions that the Government could take if they wanted to, to breathe life back into our communities—three actions in particular. First, they could close the business rates loophole that incentivises even greater levels of absentee second home ownership. At the moment, some second home owners are avoiding local taxation altogether. They claim their second homes are let for holiday accommodation, but then make no real effort to let them out at all. As a result, they can bring the homes within the business rates system, instead of paying council tax on them. However, because their “business” will have an income of less than £12,000 a year, it will qualify for small business rate relief, and therefore no council tax or business rates will be paid at all, so no contribution whatsoever will be made to local services. This, frankly, is a scam, and one that hurts communities like mine.

I commend the Government for launching a consultation on tackling this loophole, but it seems to me that they could take action now, and that the action they need to take is pretty obvious. The Government should bring the law in England into line with that in Wales, where an owner needs to prove that their property has been let for a minimum of 70 days per year in order to qualify as a business. At a stroke this would mean that thousands of second homes would be brought into paying tax and contributing towards the local communities that they damage by their absence.

Secondly, the Government could give local authorities the power to levy higher council tax on second homes. Earlier this year, the Government announced that they are introducing provisions to allow local authorities to triple the council tax on homes left empty for five to 10 years, and to quadruple it on those empty for more than a decade. That is a welcome move, but it raises the question of why the Government have not extended those powers to second homes. If they were to do so, councils could choose to set a higher rate of council tax on second homes in those places where there is a threat to the sustainability of the local community.

Closing the business rates loophole and allowing local authorities to increase council tax on second homes would have some impact in dissuading people from buying second homes in those towns and villages that are most under threat. I suspect that someone who can afford at least £500,000 for a second home will not be put off by another £2,000 or £3,000 a year in council tax, but the key purpose of these moves would be to secure additional funds, to be used to provide compensatory subsidies to schools, post offices and bus routes suffering from the lack of a permanent population, and to pump-prime new affordable housing developments for local families, to give those communities a fighting chance of reviving and surviving.