The waves of public opinion crashed up against second homes ownership when seaside town St Ives in Cornwall used a local referendum last week to prevent development for all but locals.
The vote resulted in more than 80% of voters backing the blocking of planning permission for the building of second homes and developers selling new homes to those from out of the area.
This has, unsurprisingly, proved to be a little controversial. The referendum itself has been seen as contrary to the spirit of the legislation allowing the referendum. And one company has filed for a judicial review, arguing that the ban is unlawful. Housing minister Brandon Lewis has even said: “Trying to impose state bans on who can own property is totally inappropriate and simply will not stand up.”
Trojan horse?
Yet it was Lewis’s department that unwittingly created the ability to do just that by introducing neighbourhood plans in 2010.
Ghislaine Halpenny, director of communications at the British Property Federation, said: “Neighbourhood plans were introduced to provide local people with an opportunity to help shape their area and to encourage the supply of new homes that met the needs of local communities, rather than curtailing further development.”
Far from making it easier to build a home, the plans could make it harder, because more analysis and legal scrutiny of each application will be needed.
For St Ives’ Conservative MP Derek Thomas, this is a good thing. He said: “They [St Ives] have been subject to an enormous amount of development without any local say other than through St Ives Council, which had few powers other than to comment.”
Thomas said the positives for locals outweighed the possibility of less housing being built, as the ban could ultimately precipitate a fall in values to more affordable levels, something he said the area was crying out for.
Will the second homes rebellion spread?
Government policy is not to deflate house prices by eliminating second home ownership, no matter how much it could discourage the practice by using 3% hikes in stamp duty. Does it need to step in to prevent the spread of the St Ives rebellion to London?
So far there is little sign of contagion. Only one other authority has made or passed plans to curtail second home ownership.
In 2013, Lynton & Lynmouth Council in Exmoor National Park, Devon, passed its referendum banning second home development. Andrea Davis, a councillor and chairman of Exmoor National Park, said that while other national parks and local authorities had called to find out about Exmoor’s plans, so far only St Ives had followed through.
This lack of follow-up may be the result of the amount of planning it takes to get the vote to the people, she said.
Or it may be because everyone is waiting to see what happens with St Ives.
Upping the stakes
For Halpenny, such interest will still up the stakes for government, which will be keen not to encourage referendums elsewhere.
Thomas said that so far the government had kept its own counsel, and still actively encouraged the neighbourhood plan idea.
In part, this is because the impact of St Ives’ move is limited with no restriction on the sale of existing housing stock to outsiders. But should it spread to areas where build-to-rent schemes are a growing part of the market, then the situation could change.
For Halpenny, it could well lead to the Department for Communities and Local Government aiming to end the powers within neighbourhood plans to pick on second homes.
And with the St Ives vote still awaiting a decision after being put to judicial review, it is possible government action is yet to come.
Second home ownership data
Ownership figures from 2011 Census
St Ives:
2,653 homes
593 second homes
22.4% of the total
Cornwall:
260,077 homes
14,446 second homes
5.6% of the total
Cornwall has the highest number of second homes of any area in the UK
Average income
Cornwall £21,085
St Ives £16,663
Average house prices
Cornwall £242,704
St Ives £324,501
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