Are second homes bad for the rural economy?

Yes... says Ryedale Liberal councillor Nelly Trevelyan

I know people who own second homes, and they are not all my personal enemies. I like some of them individually as people.

And I'm not anti all forms of tourism by any means. But there is a real problem here, I think.

I live in Spaunton in the North York Moors, and I know there are some villages where as many as 40 per cent of homes in the village are holiday homes or second homes. If you have a tiny hamlet of 12 houses, and ten of these houses are holiday cottages, then the community cannot hold itself together.

The head teacher of Rosedale school tells me that she is worried about falling school roles because local young families cannot afford to buy houses at Rosedale. Families that work the land are being shunted off to live in less expensive housing developments in places such as Kirkbymoorside and Pickering and they are having to commute to shear the sheep.

Quite well qualified young people too - people with nice jobs such as teachers - cannot afford to buy homes because all the picturesque little houses are being snapped up. They are being advertised to rich Londoners by estate agents in Mayfair. It's a different economy down there. How can people living here compete with them on price?

The problem isn't that we don't have enough homes in Ryedale; it is that we don't have enough homes local people can afford. If you look in estate agents, there are plenty of homes for sale; they are just too expensive. So you have holiday homes that are lying empty most of the year, and second homes that are often completely empty, while local people can't afford to buy.

Tourism does bring some benefits. But it is all to do with capacity. How far can it go? It is a cultural problem, because if half the houses in a village are empty half the year, local societies and local activities - the WI, youth clubs - all suffer.

There may be some benefits for local shops of visitors coming, but very often they bring their groceries with them. And very often, even if they do spend locally, they want to buy different things to local people.

The other thing about tourism is that it is a low-wage industry. In Ryedale the gap between house prices and average wages is very large. People earning tourism wages don't have the money to pay for expensive housing.

There are a number of things that could be done.

A second home, I think, should be treated as a luxury.

Second home owners should not just be paying 90 per cent of the full council tax on their second home - they should be paying double or triple the normal council tax, with the money being used by local authorities to provide more affordable local homes and rural services.

I would also like to see it being made easier for barns, where appropriate, to be converted for use as local needs affordable homes - at the moment they can only be converted easily for holiday lets.

And while I am not necessarily in favour of vast numbers of new houses being built, where they are being built I would like to see more of them being affordable.

At the moment there is a theoretical requirement that for any developments of 15 homes or more, a certain proportion should be affordable. In smaller communities, that threshold is five homes.

But you would be amazed how many developments come in just under these thresholds, so developers can avoid building affordable homes.

I would like to see the affordable home requirement changed so that the 15 or five-house threshold is cumulative - so that, in any given area, once 15 (or five) houses have been built, no more new homes can be built unless they are affordable. That would help.

No... says PAUL ROUSE, retired North Yorkshire businessman and second home owner

I CAN understand that some people might feel resentment towards those who own a second home. But if you try to prevent people owning second homes, where do you stop? How many bedrooms are there in your house? Do you use them all? Do we really want to live in a state where we're not allowed to enjoy our money?

I have worked pretty hard all my life, employed thousands of people in that time, generating millions of pounds in taxes of one kind or another. If I can afford to buy a holiday home in my retirement, what's wrong with that?

I don't think the impact of second home ownership on local economies and local house prices is anything like what many people claim.

Half of second homes are bought as investments, for letting out for the holiday market. I would argue that far from harming local rural economies, these holiday homes help. If you withdrew all these properties, the tourist industry would collapse, and that would devastate many local economies.

Of the second homes not bought as holiday investments, I would say many - certainly in areas such as North Yorkshire and the Lake District - are actually purpose-built. They are not the kind of homes a family would want to live in. My own second home in the Lakes is part of a purpose-built complex. There is a large service charge to cover services such as gardening and a warden. These are not family homes and were never intended as such.

People like to talk about farm labourers' cottages that have been snapped up by some rich banker, putting the labourer's family out in the fields as a result. There may be cases like that - but they are probably few and far between.

Instead of complaining about second homes, I think we need to be addressing the question of affordable homes.

There was a problem with house prices in the village just outside of York where I live. It was becoming a bit of a commuter village. You can't stop commuting, but local councillors made efforts to ensure that a couple of affordable housing developments were put into the village. Now the village school is having to be massively enlarged, where before people were saying it had to close.

So there are ways in which it can be done. In the past, second homes paid only 50 per cent council tax. In the last 18 months or so, that has been changed so councils can now require them to pay up to 90 per cent council tax. That extra 40 per cent of council tax is supposed to be ring-fenced to pay for affordable homes.

I haven't met any owner of a second home who thinks that is a bad idea - as long as that is what the money is used for.

According to a report by the Commission For Rural Communities which came out last week, this change has already resulted in £87.5 million of extra revenue for local authorities across the country.

I understand from a Liberal Democrat councillor in the Lake District that £60,000 will build an affordable home, on a shared ownership basis, and so the tax is enough to pay for 1,450 homes each year. The trouble is, local authorities aren't using all that money for affordable homes.

The Commission For Rural Communities report gives a case study for Eden in Cumbria which sets out some of the things the extra money they received was spent on. They included a full-time assistant housing enabling officer; a part-time housing officer; a full-time project development officer; a full-time trainee economic development officer; a part-time consultation officer and a full-time cultural services officer.

I think second home owners would say, spend that money on affordable houses - or give it back!

Paul Rouse is a founder of the Association of Second Home Owners

www.associationofsecondhomeowners.com

Extra tax should fund affordable homes

Local authorities are not taking full advantage of new council tax rules designed to help them overcome the problems caused by second and holiday homes in small rural communities, the Commission For Rural Communities has warned.

Under the rules, local authorities can charge up to 90 per cent council tax on second homes. Previously it was 50 per cent.

But while most local authorities are now doing this, they are not using the extra revenue to combat the lack of affordable local housing, the committee warned last week.

"Often the funds have been spent on other priorities, outside the communities affected, or there has been a lack of agreement between local authorities or excessive bureaucracy in administering the funds raised," its report said.

In North Yorkshire, approximately three per cent of homes are second homes - and the problem is acute in the Yorkshire Dales and the North York Moors.

North Yorkshire County Council is beginning to tackle the problem of lack of affordable homes, according to the commission. Across the county, 22 schemes have been identified which could provide up to 156 affordable homes.

In some parts of Ryedale, the problems caused by second homes are particularly acute.

Across the district, about 850 homes are "second" homes - or about 3.5 per cent of the housing stock, according to the district council.

In idyllic rural villages such as Hutton-le-Hole, up to a quarter of all homes can be second or holiday homes.

According to development control manager Gary Houseden, this leaves rural communities blighted by a growing number of empty homes, and prices being pushed up out of the reach of local people.

Ryedale housing chief Coun Howard Keal says in Ryedale, the ratio of earnings to property prices is one of the worst in the country. He would like local councils to be allowed to charge second home-owners double the usual council tax, to raise money to tackle the problem.

"We have whole tranches of housing that have been taken out of the reach of local people," he says.

Updated: 09:51 Wednesday, March 15, 2006