Holiday Homes and Second Homes
Updated: Jun 16
Holiday homes and second homes are a paradox for the rural dweller. On one hand tourism provides income and employment to the local economy. On the other hand holiday lets and second homes deprive the local community of much needed affordable housing to the detriment of that community. This results in a migration of young people away from rural areas and a migration of better off older people into rural areas.
This is an issue that I have considered greatly over the last five years as me and my wife planned to buy a home in Northumberland to live in, whilst leaving our adult children to live in our current home in Spalding. Equally, I am intimately aware of the situation in Lincolnshire and the Eastern counties of Norfolk and Suffolk. It is complicated and a fair balance is difficult to strike.
Second homes are problematic in rural areas. In some cases the purchase of a second home and using it as a holiday let is an essential prudent action to provide for your future. If you are a tenant farmer with your home as part of the tenancy this can enable you to own a home whilst still earning from your tenancy. If you are on a farm of such a size not to produce a good household income the diversification into holiday or even residential lets can be a lifeline to ensuring profitability or even the ability to survive financially. I have friends serving in the armed forces whom by having a holiday let are able to ensure providing themselves with a home when they leave the forces, whilst at the same time access to a non-military home for their own use if they wish. In such a way second homes and holiday homes provide an essential ability for people to provide for themselves.
However, the recent fuel rebate paid via council tax has brought an issue of fairness to a head in that second home owners have also enjoyed this refund. Nationally over 301,000 registered second homes benefitted from this refund, 3538 of those second homes are registered in that most rural of counties, Northumberland representing about 2% of the housing stock in that county. A further 7.5% of housing stock are estimated to be holiday lets with an understandable bias towards the coast. In North Norfolk over 9% of homes are registered as second homes, if you add to this holiday lets you are approaching 18%, nearly 1 in 5 residences tied up in a combination of holiday lets and second homes. Also consider that registered second homes can qualify for up to 50% council tax relief. Many holiday lets can qualify for small business rates relief. Is this fair?
Perversely this is a paradox because those with second homes and holiday lets do contribute considerably to rural economies. Yet they remove potential income from the very local authorities that have a responsibility to home those without homes. There may be a limiting factor to holiday lets, that is in many holiday areas they are beginning to struggle to find people to service those premises because they cannot afford to do such relatively low paid jobs and live in the area. This difficulty extends to other aspects of staffing tourism and hospitality as well as being a difficulty for other rural industries such as agriculture. For any community to be sustainable it has to be able to provide basic affordable services, in this case housing, to the people that you wish to work in that community. The alternative is that you end up with towns and villages turning into stale dormitories or gentrified parodies of a functioning community only available to rich people. Burnham Market in Norfolk comes to mind and I fear Bamburgh and Warkworth in Northumberland and possibly Woodhall Spa in Lincolnshire are evolving in the same way, although those living there may disagree.
Kerry Booth of the Rural Services Network describes the need for affordable housing, “ Appropriate housing affordable on local wages is the glue that holds our rural communities together.” I agree with this. So often we talk of “sustainable farming” but not enough do we talk about “sustainable communities”. I touch on this issue in an earlier post https://www.farmersfriendlincs.com/post/what-about-a-socially-sustainable-countryside .
I would like to think that a possible solution may be in attaching and enforcing covenants to properties that prevent them being used as holiday lets. But I fear this may not be the case, for as I looked around a property in Warkworth that had such a covenant people were bidding tens of thousands over the asking price, most likely as a second home. Another viewer explained to us the dire position she was in, in that she had sold her home in the first lock down and moved in with someone as a temporary measure, she was now wanting to buy a place to live locally and the prices were outstripping the proceeds from her earlier sale. Second home buyers do pay extra stamp duty, but lets be realistic, if you can afford the luxury a second home this is unlikely to make a difference.
House building is in part the answer, but we must be careful that these are both affordable and appropriate to people’s economic, social and welfare needs and we avoid a race to the bottom in housing quality. We also need to ensure matching services such as schools, roads, water, power, healthcare and essential shops and servicing businesses grow with the population. This last point is a strong failing in my home town of Spalding and its surrounding area.
There is no easy solution, but a balance of housing stock and how it is used needs to be sustainable and this is currently not the case in many rural areas.