How holiday homes affect house prices
Having a holiday home is a dream for many people. A little bolt hole that’s all yours, where you can flee every time you get overrun by the demands of the city. Or, alternatively, an asset that will appreciate in value at the same time as bringing in some much-needed passive income. There are many reasons why holiday homes are a good idea at an individual and personal level. But what about at a wider and societal level? Are holiday homes having another kind of impact on the housing market and local communities?
A new two-day street survey on the Suffolk coast has pointed out some of the potential problems with holiday homes. The poll, carried out by the local Liberal Democrat party, was a part of their campaign against the tax loophole on second home ownership. Earlier in the year, the party had warned that some homeowners were registering properties as second homes in order to avoid paying council tax. In applying for this tax relief, owners could also get exemption on business rates, meaning they were paying no tax at all on second homes.
The survey found that many of Southwold’s – the town where the survey was carried out – holiday let properties were empty. This was in mid-June, a period that constitutes almost peak holiday season. The properties only need to be classified as holiday lets in order to avoid tax, yet only a few had trade waste bins – a requirement for holiday properties.
It is trends like this that are potentially damaging small communities. With so many of the properties in the town empty, this has a huge impact on services and local businesses. Whole swathes of some parts of the UK have become ghost towns in the off peak holiday periods. And then there is the issue of house prices. Many local people in holiday resort areas have found that they have been priced out of the market due to inflated house prices caused by the second home market. Young people who have grown up in these areas often find they cannot afford to buy property there and have to move away.
However, it is also true that but for holiday home ownership, some small communities would have struggled to adapt to the loss of traditional industries such as fishing. As always, there are two sides to every story. And owning a holiday home can be a great investment for both you as an individual and for small communities looking to profit from tourism. As long as it’s done sensitively.
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