The cost and consequences of second homes

Demand for second homes has risen sharply since the pandemic, paralleled by a surge in house prices, especially in rural and most especially coastal areas.

At the same time more and more properties are available for short-term holiday lets, driven by the growth in popularity of Airbnb’s.

The question to be considered is not so much the moral one of whether it is right to own more than one property at a time of shortage, but the social and economic consequences of having swathes of property vacant for large periods of the year.

There are benefits to second homes. They tend to boost the construction industry in the local area and also tourism and all the income to a range of local businesses that arise from that. Both of these industries are important drivers of the economy and both are important priorities for Northern Ireland.  

But the negative consequences are profound. Second homers are wealthier than local first-time buyers and they can very rapidly push up prices so they are no longer affordable to local people.

This process has been underway for some time in Cornwall. Last year buyers of second homes in that county paid an average of £344,514, while first-time buyers spent £240,857, up from £190,959 last year. Therefore many young people have been forced to leave, resulting in an older population and a shortage of workers who can earn enough to get by.

And the Welsh Housing Justice Charter campaign group said it regularly receives calls from nurses, teachers, firefighters and those working on lifeboats who can no longer afford to live near where they work and volunteer.

There are 24,873 registered second homes in Wales and 12,000 in Cornwall.

Gwynedd has the highest number of second homes at 5,098 - 20% of all second homes in Wales - and one in every 10 houses in the county is now a second home.

The coastal village of Abersoch is in that county. It sees its population of 600 skyrocket to 30,000 in the summer months.

Further south only two of the 50 properties in the small Pembrokeshire village of Cwm-yr-Eglwys, have permanent residents. As of 2021 there was only one Welsh speaker left.

The impacts can be devastating – local schools closing because the families of local youngsters have been forced out; the closure of local Post Offices and their replacement by gift shops; increased isolation of older people and in Wales specifically, an accelerated decline of the language (areas where it still thrives are precisely those targeted by second homers).

And the growth of the Airbnb movement has exacerbated these trends as Cath Navin, co-founder of Cornish protest group First Not Second Homes, said: “Last month, there were 111 Airbnbs in and around St Agnes, 96 of which were whole houses. If you looked for long-term rentals, the closest place was Portreath (seven miles away). There’s nothing locally for people to live in.”

There are more than 21,000 people on Cornwall’s housing register which leads to the grotesque anomaly of local people being housed in bed and breakfast accommodation and static caravans and even makeshift camps in gardens, whilst second homes lie empty.

Understandably unrest is growing in both Cornwall and Wales as a consequence, with organised protests, graffiti appearing on affected buildings and there has been some action to address the failings in the housing market and lack of affordable homes.

The worst affected area in Northern Ireland to date has been the north coast where the issue has caused Causeway Coast and Glens Council to demand a change in planning law to control the problem.

It estimates that the borough will have 2,700 second homes by 2030 and that up to 51% of dwellings in Portballintrae and 31% in Cushendun are second homes.

The council has looked at some of the measures taken elsewhere in the UK and want changes to the present system in Northern Ireland where second home ownership is unregulated and therefore not possible to control.

This is an important matter to resolve not least because we need to find the right balance to allow tourism to flourish, but we also need the tools to act if unfairness and consequent discontent reach levels seen elsewhere in the UK.

So as well as monitoring the impacts that second home owners have in Northern Ireland it is imperative to study the impacts of the preventative measures tried elsewhere.

In Wales, for example, there are now three categories of homes, those used as sole or main residences, those that are not and ‘short-term lets’. Where there is evidence in a specific area of the detrimental effects of second homes and short term letting the numbers in these categories can be restricted.

Welsh councils also have discretionary powers to charge a council tax premium on long-term empty properties and second homes.

And those looking to buy second homes or buy-to-let properties have to pay an extra 4% in land transaction fees.

Cornwall has plans for a 100% Council Tax premium on second homes which could bring in an extra £25 million in revenue each year.

This will be made possible by  the government’s Levelling Up and Regeneration Bill which will give English councils the power to introduce  a 100% Council Tax premium on second homes.

Another important measure would be to tighten up the rules surrounding holiday lets, which currently are registered for business rates rather than categorised as second homes.

And whilst every other part of the UK has developed some levers for controlling second homers, Northern Ireland is yet to act.

There appears to be no concerted attempt by the Department of Infrastructure to study the problem, examine the merits and economic steps that could be taken to address it, and as long as that continues the future of some of our most beautiful areas remains in the hands of developers and the monied.