Rapid Evidence Assessment of the Research ... - Rural Housing

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Rapid Evidence Assessment of the Research Literature on the Purchase and Use of Second Homes 8. Has there been any improvement in the supply and quality of the housing stock as a result of second home purchases? Introduction 156. This chapter reviews evidence on both the direct and indirect effects of second home purchase on improvements in housing supply then on improvements in housing quality. The direct effects of second home purchase on improving housing supply 157. It might be anticipated that second home purchase in particular locations would stimulate the supply of housing, but virtually all discussion concerning the direct relationship between second homes and supply assumes that they reduce availability, typified by this comment from the 2004 Suffolk County Council study of ‘Possible Impacts’ that: 44 “Increasing numbers of second homes contribute to a decreasing supply of available housing” (p9). 158. However, the evidence for this trend is very limited, and the general problem in the locations affected, for example, in high demand locations in Devon, Cornwall, Norfolk and Suffolk, in national parks and AONBs, appears to be that there is an overall lack of housing supply as tight controls on new residential development result in high land and property values. 159. One potential effect of the demand for second homes in rural areas might be that some ‘problematic vacants’ (Fielder & Smith, 1996) which are: “unoccupied for substantial periods of time and are often in poor condition” (Wallace et al, 2005, p2). are brought back into use. The consultation paper on empty homes issued by the ODPM (2003b) identified that investment properties and those held by two co-habiting owners might be viewed as second homes, and other relevant properties might include vacant properties formerly housing agricultural workers. However, no evidence of this trend is available. The indirect effects of second home purchase on improving housing supply 160. The main evidence that second home purchase has had an indirect effect on improving housing supply has been provided by research examining the impact of local authorities having the discretion to reduce the discount on Council Tax for owners of second homes; a policy change introduced in April 2004. Research undertaken by De Montfort University (Oxley & Brown, 2006) on behalf of the Commission for Rural Communities sought to evaluate the early impacts of this policy, mainly in relation to the financial year 2004/5. In particular, it considered the extent to which the new power was used by local authorities to provide new resources to increase the supply of affordable housing and related services. 161. Structured telephone interviews were undertaken with a sample of rural authorities in England, with a bias in favour of those with a large proportion of second homes. The local authorities contacted comprised of 18 counties, 42 districts and 4 unitary authorities, and a response rate of 93 per cent was achieved.
Has there been any improvement in the supply and quality of the housing stock as a result of second home purchases? 162. The research established that almost all rural local authorities with significant numbers of second homes had exercised their discretion to apply a reduced Council Tax discount for the owners of second homes. Of those authorities with more than 0.5 per cent of their stock classified as second homes, only 10 out of 104 did not apply the discount in 2004/5. The application of the reduced discount raised an additional £87.5m, of which over £46m was raised by rural authorities. 163. Of the £15 million raised in the ten rural authorities who raised the most additional revenue, £7m has been used for affordable housing development or related purposes, and the additional resources have, in some locations, helped to ameliorate the negative aspects of large proportions of second homes. However, the additional funds generated varied widely depending on the volume of second homes in the locality. For example, in South Hams, Devon (11 per cent second homes) the amount raised was £2.25m, whereas in Test Valley, Hampshire (0.6 per cent second homes), only £160,000 was raised. In 11 per cent of rural districts applying the reduced discount over £1m was raised, but in 55 per cent of districts less than £250,000 was raised. 164. A Devon case study identified how, in a mainly rural county with large numbers of second homes, county council support for affordable housing has had an important impact on housing provision. In South Hams, for example, the affordable housing development programme for 2004/5 was increased from 70 to 130 new dwellings. Other housing-related projects included temporary accommodation for former offenders, supported housing for young people and adaptations for disabled people. 165. However, in two-tier authorities where the additional revenue is distributed on the basis of agreements between county and district authorities, such arrangements are vulnerable to changes in priorities at the county level, with the agreement to return revenue for affordable housing having ended in Devon and currently under threat in Cornwall (CRC, 2007). 166. Should the value of homes be re-assessed for Council Tax, there is the potential that improved second homes will attract higher charges and provide additional resources to fund affordable housing and other related activities. The direct effects of second home purchase on improving housing quality 167. This question might be expressed as ‘Do second home purchasers invest in their homes?’ As is characteristic of much of the debate about the impact of second homes, there is much assumption but little evidence. For example, the Council of Mortgage Lenders study (Gilbert, 2001) asserts, in reviewing the relationship between ‘Second Homes and Local Communities’ that: “Second home-owners are among the most frequent users of local builders, electricians and craftsmen thereby increasing the demand for skilled local trades people” (p36). 168. It is generally assumed that spending on improving second homes has upgraded the housing stock and brought new income into local economies, but most of the evidence dates back to the 1970s when renovation grants were available to deal with the extensive levels of disrepair in urban and rural areas. There is little recent evidence, although Welsh planners identified that second homes tended to be those which were less attractive to local people, due to location or condition (Tewdwr-Jones et al, 2002), and there is some support for this from the study of the Isle of Arran (Craigforth Consultancy and Research, 2007), that in 2006 there was: “considerable interest among older people in older larger properties often needing investment to down scale” (p31). 45
Page 1 and 2: Rapid Evidence Assessment of the Re
Page 3 and 4: Contents Foreword 7 Executive Summa
Page 5 and 6: Foreword by Professor Glen Bramley
Page 7 and 8: Executive Summary There is much dis
Page 9 and 10: Executive Summary There is a lack o
Page 11 and 12: Introduction 6. We have also applie
Page 13 and 14: How have second homes been defined
Page 15 and 16: Definitions used in the UK Census H
Page 17 and 18: 42. How have second homes been defi
Page 23 and 24: To what extent (if any) have second
Page 25 and 26: Number of Second Homes 85. To what
Page 27 and 28: Future trends To what extent (if an
Page 29 and 30: What specific factors attract peopl
Page 31 and 32: What specific factors attract peopl
Page 33 and 34: What is the geographical distributi
Page 35 and 36: What is the geographical distributi
Page 37 and 38: 6. What are the social and demograp
Page 39 and 40: What are the social and demographic
Page 41: 7. Do households own more than one
Page 45 and 46: 9. What are the social and economic
Page 47 and 48: Social impacts 183. Gallent et al (
Page 49 and 50: What are the social and economic im
Page 51 and 52: 10. Evidence Gaps and Further Resea
Page 53 and 54: Evidence Gaps and Further Research
Page 59 and 60: References Communities and Local Go
Page 61 and 62: References Office of Population, Ce
Page 63 and 64: Appendix A Direct Line Sources Data
Page 65: National Housing and Planning Advic

Rapid Evidence Assessment of the Research ... - Rural Housing

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