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  1. The Staggers
15 April 2023

Should we get rid of second homes?

Locals are being priced out of rural communities, but the alternative could threaten tourism, without getting to the root of the problem.

By Henry Hill

It seems almost fantastical now, as Michael Gove consults on expanding the reach of the planning system by requiring permission to turn homes into holiday lets, that this government was only a few years ago committed to long-overdue reform to unlock the new homes this country desperately needs.

Nor is it any less surreal to see right-leaning newspapers such as the Times and the Daily Telegraph, so often happy to write about areas being “threatened” with new construction or to praise this or that heroic local campaign against economic development, suddenly grasping the paramount importance of housing supply once the interests of second homeowners are threatened.

As so often when ministers reach for the old-woman-who-swallowed-a-fly playbook, Gove is trying to palliate a real problem. In many rural communities in the more charming bits of the country, demand for property is hugely disproportionate to the strength of the local economy. This results in locals being priced out, and exacerbates the trend of young people leaving to seek their fortune in cities (good luck with that). Holiday lets are a particular problem because, a bit like student lets, they are seasonal; areas with too many risk becoming ghost towns in the off season.

Yet there are some obvious dangers with the proposals, not least of which that it is not clear how many properties it would actually bring into the reach of locals on local wages. Investors with large portfolios might be deterred (although they are best placed to lobby the council), but there’s no reason for people who have just one holiday home to sell when they can just leave it vacant.

[See also: Labour’s Five Missions: Why Housing is Conspicuously Absent]

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That in turn means fewer rooms available to tourists and visitors, a serious risk in an area such as Cornwall where tourism accounts for a huge proportion of the local economy. Worse, if there isn’t a substantial fall in house prices then who are those ex-investors selling to? Quite possibly wealthy retirees, who have a habit of colonising rural communities and turning them into museums. And unlike absentee second homeowners, they do vote – and tend to vote consistently against the sort of measures that might make building a life in such areas a viable proposition for young people with families. (Naturally they then campaign vociferously against the consequences, even if that means trying to save a school with no children.)

More broadly, local authorities by nature have no incentive to take national trends or needs into account. There’s a reason every attempt at planning reform in the past few decades has aimed at reducing their role. Trying to force a different allocation of an inadequate pie will never, in my view, produce good results in the long run. But the politics of housing, from London to Liskeard, is all about pretending we can fix a solution in place and then dispel the consequences by fiat.

A prosperous Cornwall will need a thriving, inevitably tourism-focused economy to pay good wages, and housing sufficient for the combined demand of its workers and visitors. Nothing short of building those homes is a solution.

[See also: The great housing con: why the coming crash will rewrite the UK economy – Audio Long Reads]

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