Last week it was announced that North Devon’s second homeowners could pay double the amount of council tax after one year of it no longer being a residential property – previously two. That’s alongside the county-wide increase of three percent from April 2024.
This is said to bring in an income of £4.2 million from 13,363 second homes, which could be used towards resources for the local council, police and fire services.
Similarly, it was revealed that Dorset second homeowners were considering selling up if the local council went ahead with plans to double their council tax bills – which could see an extra £9.5 million gained from 5,700 second homes.
And Cornwall second homeowners have been warned not to avoid council tax premiums that could raise £25 million a year for Cornwall council from 13,292-second homes.
But what can the people behind the businesses do to tackle the issue amid rising costs?
“It’s interesting to see discussions local councils are having to impose stricter regulations on second homeowners in coastal areas.
The main problem is – post-pandemic, there is a classic case of “supply and demand”.
Thousands of people purchased second homes in the southwest during this time, which they had no trouble renting out at very high prices as the UK eased restrictions.
However, the market was badly struck once restrictions eased and international travel returned.
With holiday home investors out of pocket due to lower demand, many expected the price of rentals to fall, but owners are reluctant to reduce prices because the energy costs are going up, so it’s harder to make a profit and, consequently, they are losing money due to lack of bookings.
And with many holiday homes left empty for long periods throughout the year, local residents are becoming frustrated as the price of tourism is being overshadowed by the lack of support from second homeowners towards the local community, which is struggling amid the cost-of-living crisis.
However, while the rise in council tax is thought to boost the local economy by millions, it’s still unknown how it could affect second homeowners, some who’ve invested large amounts of their life savings on rental properties.
It’s likely many second homeowners rely on their rentals for an income or at least part of it- and need to let out their holiday homes for a large percentage of the year to make a profit on their investment, or even just breakeven.
With rising costs for things such as electricity bills making being a homeowner more expensive, the news that the council tax is increasing will only force holiday properties to increase in price as owners tackle inflation.
As the cost of UK holidays gets more expensive, Brits will still be interested in renting properties in prime coastal locations for top dollar, but others will look elsewhere and second homeowners will be forced to sell up, which will undoubtedly impact this country’s tourism sector.
Locals will have their towns back. But to what detriment?
The answer to the issue is not to continue increasing costs, but for second homeowners to ensure they are providing a good product at a fair price and engage more and support the local community, especially when their properties are empty during non-busy periods”. Said Harry Roberts, Managing Director of My Favourite Cottages.
